Prospectus for the IPO

Transcription

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Table of Contents
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section A – Introduction and Warnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section B – Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section C – Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section D – Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section E – Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ZUSAMMENFASSUNG DES PROSPEKTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt A – Einleitung und Warnhinweise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt B – Emittent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt C – Wertpapiere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt D – Risiken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt E – Angebot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 1: RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Risks Relating to Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Risks Relating to the Relationships with the Current Shareholder . . . . . . . . . . . . . .
C. Risks Arising from the Offering of Siltronic AG’s Shares . . . . . . . . . . . . . . . . . . . .
PART 2: GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Purpose of this Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Cautionary Statement Concerning Forward-Looking Statements . . . . . . . . . . . . . . .
D. Industry and Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Documents Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Presentation of Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Currencies and Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Enforcement of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 3: THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Subject Matter of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Price Range, Offer Period, Offer Price and Allotment . . . . . . . . . . . . . . . . . . . . . . .
C. Information on the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Dividend and Liquidation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Delivery and Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. ISIN/WKN/Common Code/Ticker Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Transferability of the Shares; Lock-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I. Information on Existing Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Allotment Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
K. Stabilization measures, Over-Allotments and Greenshoe Option . . . . . . . . . . . . . . .
L. Lock-up Agreement, Limitations on Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Admission to the Frankfurt Stock Exchange and Commencement of Trading . . . . . .
N. Designated Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O. Interest of Parties Participating in the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 4: PROCEEDS OF THE OFFERING AND COSTS OF THE OFFERING AND
LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 5: REASONS FOR THE OFFERING AND LISTING AND USE OF PROCEEDS
PART 6: DIVIDEND POLICY; RESULTS AND DIVIDENDS PER SHARE; USE OF
PROFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. General Provisions Relating To Profit Allocation and Dividend Payments . . . . . . . . .
B. Dividend Policy and Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 7: CAPITALIZATION AND INDEBTEDNESS: STATEMENT ON WORKING
CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Statement on Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 8: DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PART 9: SELECTED CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . .
A. Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Additional Financial Information and Key Performance Indicators . . . . . . . . . . . . . . . . . .
PART 10: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Factors Affecting the Comparability of Our Results . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Key Factors Affecting Our Results of Operations and Financial Condition . . . . . . . . . . . .
D. Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Selected Data from the Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . .
F. Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Information from the Audited Unconsolidated Financial Statements of the Company
Prepared in Accordance with the German Commercial Code (Handelsgesetzbuch) as of
and for the Fiscal Year Ended December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Quantitative and Qualitative Disclosure about Market Risk . . . . . . . . . . . . . . . . . . . . . . .
I. Critical Accounting Policies and Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 11: MARKETS AND COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 12: BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Our Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Our Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Our Business Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Wafer Portfolio and Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Sales and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I. Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Cost- and Efficiency-Improvement Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
K. Raw Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L. SSW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Proprietary Information and Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
N. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Q. Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
R. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 13: MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Certain Information Regarding the Members of the Management Board, Senior
Management and Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Controlled Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Code of Conduct and Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. German Corporate Governance Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 14: SECURITY OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Security Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Controlling Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 15: CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS . . . . . . . .
A. Relationship with Wacker Chemie AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Description of Transactions and Loans with Related Parties in Last Three Financial Years .
PART 16: EXCHANGE CONTROLS AND LIMITATIONS AFFECTING SHAREHOLDERS .
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PART 17: GENERAL INFORMATION ON SILTRONIC AG AND OUR GROUP . . . . . .
A. Corporate Formation and Legal Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Commercial Name and Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Fiscal Year and duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Corporate Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Group Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Statutory Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Announcements, Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 18: DESCRIPTION OF SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Form, Certification and Transferability of the Shares . . . . . . . . . . . . . . . . . . . . . . . . .
C. General Provisions Governing Subscription Rights . . . . . . . . . . . . . . . . . . . . . . . . . .
D. General Provisions Governing a Change in the Share Capital . . . . . . . . . . . . . . . . . .
E. Changes in Our Share Capital during the Last Three Fiscal Years . . . . . . . . . . . . . . .
F. Authorized Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Conditional Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Authorization to Issue Convertible Bonds and Other Instruments . . . . . . . . . . . . . . .
I. Repurchase and Sale of Treasury Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. General Shareholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
K. Shareholder Notification Requirements; Mandatory Takeover Bids; Directors Dealings
L. Amendment to the Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
N. Squeeze-out of Minority Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O. Dividend Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P. Registration of Siltronic AG with Commercial Register . . . . . . . . . . . . . . . . . . . . . . .
Q. Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 19: TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Overview of Material German Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Overview of Material Luxembourg Tax considerations . . . . . . . . . . . . . . . . . . . . . . . .
C. Overview of Material U.S. Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 20: UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Greenshoe Option and Securities Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Termination/Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Selling Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 21: GLOSSARY OF CERTAIN TERMS AND ABBREVIATIONS . . . . . . . . . . . . . .
PART 22: INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 23: RECENT DEVELOPMENTS AND OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . .
A. Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. No Significant Change Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
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G-1
F-1
O-1
O-1
O-1
O-1
U-1
PROSPECTUS SUMMARY
Summaries are made up of disclosure requirements known as elements (‘‘Elements’’). These Elements are
numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a
summary for this type of security and issuer. Because some Elements are not required to be addressed, there may
be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in
the summary because of the type of security and issuer, it is possible that no relevant information can be given
regarding the Element. In such cases, the summary includes a short description of the Element with the words
‘‘not applicable.’’
SECTION A – INTRODUCTION
A.1
AND
WARNINGS
Warnings.
This summary should be read as an introduction to this prospectus.
Any decision to invest in the securities should be based on
consideration of this prospectus as a whole by the investor.
In case a claim relating to the information contained in this
prospectus is brought before a court, the plaintiff investor might,
under the national legislation of the member states of the
European Economic Area (the ‘‘EEA’’), have to bear the costs of
translating this prospectus before the legal proceedings are
initiated.
Those persons who are responsible for the summary, including the
translation thereof, or for the issuing (Veranlassung), can be held
liable but only if this summary is misleading, inaccurate or
inconsistent when read together with the other parts of this
prospectus or it does not provide, when read together with the
other parts of this prospectus, all necessary key information.
Siltronic AG (the ‘‘Company,’’ and, together with its consolidated
subsidiaries, ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ the ‘‘Group,’’ the ‘‘Siltronic
Group,’’ or ‘‘Siltronic’’) with its registered seat (Sitz) located at
Hanns-Seidel-Platz 4, 81737 Munich, Germany, together with
Credit Suisse Securities (Europe) Limited, London, United
Kingdom (‘‘Credit Suisse’’) and Citigroup Global Markets Limited,
London, United Kingdom (‘‘Citi’’ and, Credit Suisse and Citi
together, the ‘‘Joint Global Coordinators’’ and ‘‘Joint
Bookrunners’’) and COMMERZBANK Aktiengesellschaft,
Frankfurt, Germany (‘‘COMMERZBANK’’), UniCredit Bank AG,
Munich, Germany (‘‘UniCredit Bank AG’’) and HSBC Trinkaus &
Burkhardt AG, Duesseldorf, Germany (‘‘HSBC Germany’’ and,
together with COMMERZBANK and UniCredit Bank AG, the
‘‘Co-Lead Managers’’ and, together with the Joint Bookrunners,
the ‘‘Underwriters’’), have assumed responsibility for the content of
this summary and its German translation pursuant to Section 5
para. 2b no. 4 of the German Securities Prospectus Act
(Wertpapierprospektgesetz).
A.2
Information regarding the
subsequent use of the
prospectus.
Not applicable. Consent by the Company to the use of this
prospectus for a subsequent resale or final placement of the
Company’s shares by financial intermediaries has not been granted.
SECTION B – ISSUER
B.1
Legal and commercial
name.
The Company’s legal name is ‘‘Siltronic AG.’’ The Group primarily
operates under the commercial name ‘‘Siltronic.’’
B.2
Domicile, legal form,
legislation under which the
issuer operates, country of
incorporation.
The Company has its registered office at Hanns-Seidel-Platz 4,
81737 Munich, Germany, and is registered with the commercial
register (Handelsregister) of the local court (Amtsgericht) of
Munich, Germany (the ‘‘Commercial Register’’), under number
S-1
HRB 150884. The Company is a German stock corporation
(Aktiengesellschaft) governed by German law.
B.3
Current operations and
principal business
activities and principal
markets in which the
issuer competes.
Overview of Our Business
We are the world’s third largest producer of semiconductor silicon
wafers made from hyperpure silicon with a global revenue share of
14 percent in 2013, according to Gartner Inc. (‘‘Gartner’’), a
technology research firm. Silicon has been used for more than half
a century as the raw material of choice in microelectronics and the
related semiconductor wafers. Silicon constitutes the base substrate
for nearly all semiconductor devices, essentially providing the
foundation for the entire, global electronics industry. Our business
traces its origins to the start of research and development of
high-purity silicon in 1953 and has existed in its current form as
Siltronic AG since 2004. Since the development of the first
semiconductor silicon wafer in 1962, we have quickly recognized
the opportunities and prospects that presented themselves in the
semiconductor industry and have strategically invested in this
technology.
Hyperpure semiconductor silicon wafers are used for increasingly
finer structures, referred to as ‘‘design rules,’’ in the nanometer
range (measured in billionths of a meter). As a result, increasingly
powerful and energy efficient generations of chips are becoming
more feasible to produce. Our semiconductor silicon wafers
support these trends and form the basis of the most complex
semiconductor components, including high-voltage applications,
low resistivity devices in automotive engineering and
telecommunications
as
well
as
large-scale
integrated
microprocessors and memory modules for information processing.
Hence, our semiconductor silicon wafers can be found in numerous
everyday objects including cell phones, laptops, cars and many
other consumer goods.
We serve all of the top 20 leading semiconductor silicon wafer
consumers with our broad wafer portfolio and maintain long-term
relationships with all our major customers. In 2014, our five largest
customers were, in alphabetical order, Infineon Technologies, Intel
Corporation, Micron Technology, Samsung Electronics, and Taiwan
Semiconductor Manufacturing Company (TSMC). We produce our
high quality wafers through our multinational manufacturing
network in the United States, Europe and Asia, with facilities
strategically located near highly educated work forces and in close
proximity to our customers. We believe that we deliver the highest
quality customer service and provide our customers with single
local access points for our entire semiconductor silicon wafer
portfolio. We are committed to providing wafer qualities and
specifications that meet or exceed our customers’ wafer demands.
We are dedicated to drive innovation in the semiconductor silicon
wafer industry. We work in close collaboration with our customers
to continually advance their products and solutions by
manufacturing polished and epitaxial wafers according to the most
advanced design rules as specified by our customers. For example,
we are currently working with our customers on the
commercialization of the next design rule, commonly referred to as
‘‘11nm.’’ In 2013, we also started development on the following
design rule, commonly referred to as ‘‘8nm,’’ with a
commercialization target in 2017, as we are committed to being
‘‘one generation ahead.’’ In addition, we utilize the leading float
zone, or ‘‘FZ,’’ technology for wafers up to 200 mm in diameter for
S-2
wafers with extremely stable resistivity performance and high
voltage capabilities.
We have leveraged our long-standing 300 mm wafer experience
into the construction of our modern, high volume facilities in
Freiberg, Germany, and Singapore. We operate among the world’s
newest and largest 200 and 300 mm wafer facilities at our
Singapore sites. As of January 24, 2014, we expanded our
ownership and took full control of the operations of our 300 mm
wafer production joint venture with Samsung in Singapore. Our
global presence enables us to respond to customer requests
anytime and anywhere in the world in less than 24 hours and to
provide customers with a nearly 100% on-time delivery rate.
Furthermore, this fosters our close collaboration with our
customers on product design and development activities.
We have realized significant efficiency improvements and cost
reductions over the last several years. Our cost reduction roadmap
has secured total cost reductions of more than A 80 million from
2012 to 2013 (based on an application of the 2012 cost basis to 2013
volumes, adjustments to certain 2013 costs to reflect 2012
contractual and economic parameters (e.g. 2012 unit labor cost),
and excluding Siltronic Silicon Wafer Pte. Ltd. (‘‘SSW’’)) and
additional savings of approximately A 55 million from 2013 to 2014
(based on an application of the 2013 cost basis to 2014 volumes,
adjustments to certain 2014 costs to reflect 2013 contractual and
economic parameters (e.g. 2013 unit labor costs), and including
SSW beginning as of January 24, 2014). As a result, our operating
loss has decreased and our Adjusted EBITDA* has been relatively
stable in the past three years—ranging from a high of
A 122.5 million in 2012 and a low of A 112.6 million in 2013 and
increasing slightly in 2014 compared to 2013 to A 117.7 million—
despite a low growth environment exacerbated by falling prices and
increased competition.
In the three months ended March 31, 2015, we recorded sales of
A 238.7 million (no adjustments), a net profit of A 1.9 million and
EBITDA of A 40.1 million (no adjustments). In 2014, we recorded
sales of A 846.0 million (Adjusted Sales of A 853.4 million), a net
loss of A 27.0 million and Adjusted EBITDA of A 117.7 million. In
2013, we recorded sales of A 743.0 million (Adjusted Sales (taking
SSW into account) of A 875.5 million), a net loss of A 109.3 million
and Adjusted EBITDA (taking SSW into account) of
A 112.6 million. For the year ended December 31, 2012, we
recorded sales of A 868.0 million (Adjusted Sales (taking SSW into
account) of A 1,030.0 million), net loss of A 90.6 million and
Adjusted EBITDA (taking SSW into account) of A 122.5 million.
Overview of the Industry
Semiconductor devices are at the core of modern electronics,
enabling advanced features and properties. Semiconductor silicon
wafers provide the basis for most of the global production of
semiconductor devices. According to Gartner, the total
semiconductor market worldwide was 315 billion U.S. Dollars (‘‘$’’)
in 2013. Semiconductor devices include, among others,
microprocessors, memory, analog, mixed-signal and RF integrated
*
‘‘Adjusted’’ as used in relation to the performance measures Adjusted Sales, Adjusted EBITDA, Adjusted Net Cash Flow and
Adjusted Capital Expenditures refers to illustrative aggregated adjustments that have not been prepared in accordance with
IFRS or any generally accepted accounting principles and that take SSW into consideration without being indicative of
consolidation in accordance with IFRS, and do not refer to pro forma financial information or consolidated financial
information that would be comparable to the Company’s financial information prepared in accordance with IFRS.
S-3
circuits, discrete, application specific integrated circuits,
micromechanical systems (MEMS) and image sensors. All these
devices require semiconductors that are energy efficient, low cost,
high performing and highly integrated. Semiconductors offering
those characteristics increasingly require both polished and
epitaxial, hyperpure semiconductor silicon wafers of the newest
wafer generations.
Recent demand growth for semiconductor silicon wafers has been
largely attributable to the proliferation of mobile devices such as
smart phones. In addition to the continued growth of mobile
devices, future growth of semiconductor silicon wafer demand is
expected to be driven by new and emerging markets and
applications, such as healthcare, automotive and industrial, which
are increasingly incorporating advanced technologies in their
services and products. For instance, the widespread use of solid
state disks (SSD) and flash memory in PCs, laptops and tablets, the
increasing demand for processing large amounts of data in a
growing number of industries (usually referred to as ‘‘Big Data’’),
as well as its growing ubiquity in commonplace goods (usually
referred to as the ‘‘Internet of Things’’), add significant potential
for future demand growth. Pursuant to Gartner, the worldwide
merchant semiconductor silicon wafer market measured in million
square inches is expected to grow at a five percent compound
annual growth rate (CAGR) from 2013 to 2018.
According to Gartner, we have a market share of 14 percent, while
the top five suppliers accounted for approximately 88 percent of all
semiconductor silicon wafer sales in 2013. Furthermore, since 2008,
the two largest have decreased their market shares considerably by
six percent each, while we and two of our smaller competitors have
strengthened our market positions, each gaining a three percent
share.
Our Key Competitive Strengths and Our Strategy
We believe our business has the following competitive strengths
that have driven our success to date and will continue to distinguish
us from competitors:
• Strong market position in semiconductor silicon wafer
manufacturing
• Technology and quality leader
• Supplier to all top 20 semiconductor wafer consumers with
well-established relationships
• Strong track record in efficiency improvement and cost
reduction
• Strategic supply of high-quality polysilicon at competitive cost
• Experienced management team and highly skilled workforce
Our strategy is to leverage and strengthen our position among the
leaders in the large and growing semiconductor wafer industry. The
key elements of our strategy include:
• Take advantage of growing demand in the semiconductor
silicon wafer market
• Maintain and expand our technology leadership
• Continue our operational excellence and cost reduction
roadmap
• Maintain our quality leadership
S-4
•
B.4a
Most significant recent
trends affecting the issuer
and the industry in which
it operates.
B.5
Description of the group
and the issuer’s position
within the group.
Focus on improved financial performance and cash flow
generation
According to Gartner, the worldwide merchant semiconductor
silicon wafer market measured in million square inches is expected
to grow at a five percent compound annual growth rate (CAGR)
from 2013 to 2018. This growth in semiconductor silicon wafer
demand is largely attributable to the proliferation of mobile devices
such as smart phones.
Silicon semiconductor wafers are generally priced in U.S. Dollars.
The U.S. Dollar has appreciated significantly in recent months,
increasing the value of our U.S. Dollar-denominated sales in
relation to our Euro-denominated expenses.
The Company is the parent company of the Group. The Company’s
business is conducted by the Company as well as its various
subsidiaries.
The following diagram provides an overview of the Company and
its subsidiaries as of the date of this prospectus:
Wacker Chemie AG,
Germany
10%
100%
Wacker-Chemie Dritte
Venture GmbH,
Germany
Siltronic AG,
Germany
90%
100%
Siltronic Holding
International B.V.,
Krommenie, Netherlands
100%
100%
Siltronic Japan
Corporation,
Tokyo, Japan
Siltronic Asia
Pte. Ltd.,
Singapore
B.6
100%
Persons who, directly or
indirectly, have a
(notifiable) interest in the
issuer’s capital and voting
rights.
Siltronic
Singapore Pte.
Ltd., Singapore
Direct Shareholder(s)
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78%
Siltronic Silicon
Wafer Pte. Ltd.,
Singapore (SSW)
27MAY201503543733
As of the date of this prospectus, the following persons, directly or
indirectly, have a notifiable interest in the Company’s capital and
voting rights:
Ultimate Shareholder
Wacker family . . . . .
Wacker Chemie AG(2)
Public free float(3) . . .
Total . . . . . . . . . . . .
Siltronic
Corporation,
Portland, USA
100%
Wacker Chemie AG(2)
Wacker-Chemie Dritte Venture GmbH(2)
Beneficial (Indirect) Ownership of
the Company, in %(1)
Shareholding
(immediately prior to the Offering)
100%
90%
0%
100%
(1)
Refers to the indirect economic interest in the Company; the percentages
expressed are not to be construed as an indication that voting rights attached
to these shares can be controlled by the respective entities/persons.
(2)
Wacker-Chemie Dritte Venture GmbH owns 90 percent of the Company
directly and is a wholly-owned subsidiary of Wacker Chemie AG, which owns
ten percent of the Company directly.
S-5
(3)
Other shareholders/Public free float refer to shareholdings with less than
three percent in the Company before and after the start of trading in the
Company’s shares.
Voting rights.
Each Company’s share carries one vote at the Company’s
shareholders’ meeting. There are no restrictions on voting rights.
All shares have identical voting rights.
Direct or indirect control
over the issuer and nature
of such control.
Wacker Chemie AG—through its direct holdings (ten percent) and
the holdings of its wholly-owned subsidiary, Wacker-Chemie Dritte
Venture GmbH (90 percent)—owns more than 30 percent of the
voting rights in the Company and is, therefore, considered to hold a
controlling interest in the Company pursuant to the German
Securities Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz, WpÜG).
Upon completion of the Offering and assuming (i) the placement of
4,411,765 New Shares resulting in gross proceeds for the Company
of approximately A 150 million at the mid-point of the Price Range
(as defined below in E.3) in connection with the Offering and
(ii) exercise of the Greenshoe Option (as defined below in E.3),
Wacker Chemie AG will continue to directly hold approximately
8.5 percent, and continue to indirectly hold approximately
50.8 percent, of the Company’s share capital. Based on the same
assumptions and further assuming the placement of 5,000,000 New
Shares and 3,947,368 New Shares, respectively (resulting in gross
proceeds for the Company of approximately A 150 million at the
lower end and upper end, respectively, of the Price Range), Wacker
Chemie AG will continue to directly and indirectly hold
approximately 57.8 percent and 60.5 percent, respectively, of the
Company’s share capital. As a result, Wacker Chemie AG will
continue to hold a controlling interest in the Company pursuant to
the German Securities Acquisition and Takeover Act
(Wertpapiererwerbs- und Übernahmegesetz, WpÜG) irrespective of
where the Offer Price will be set within the Price Range.
B.7
Selected key historical
financial information.
The financial information contained in the following tables is
extracted or derived from our audited consolidated financial
statements as of and for the fiscal years ended December 31, 2014,
December 31, 2013 and December 31, 2012 and the Company’s
unaudited condensed interim consolidated financial statements as of
and for the three-month period ended March 31, 2015 and our
internal reporting system. The audited consolidated financial
statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(‘‘IFRS’’) and the unaudited condensed interim consolidated financial
statements have been prepared in accordance with IFRS on interim
financial reporting.
KPMG Wirtschaftsprüfungsgesellschaft (‘‘KPMG’’), has audited and
issued an unqualified audit opinion with respect to the consolidated
financial statements covering each of the fiscal years ended
December 31, 2014, December 31, 2013 and December 31, 2012. The
aforementioned audited consolidated financial statements of the
Company and the audit opinion thereon, as well as the Company’s
unaudited condensed interim consolidated financial statements as of
and for the three-month period ended March 31, 2015 are included in
this prospectus.
Where financial data in the following tables is labeled ‘‘audited,’’ this
means that it has been extracted from the audited financial statements
mentioned above. The label ‘‘unaudited’’ is used in the following
S-6
tables to indicate financial data that has not been taken from the
audited financial statements mentioned above but rather was taken
from either unaudited condensed interim consolidated financial
statements, our internal reporting system or has been calculated based
on such information. All of the financial data presented in the text and
tables below are shown in millions of Euro (in B million), except as
otherwise stated. Certain financial data (including percentages) in the
following tables have been rounded according to established
commercial standards. As a result, the aggregate amounts (sum totals
or sub-totals or differences or if numbers are put in relation) in the
following tables may not correspond in all cases to the amounts
contained in the underlying (unrounded) figures appearing elsewhere
in the following tables. Furthermore, in those tables, these rounded
figures may not add up exactly to the totals contained in those tables.
Financial information presented in parentheses denotes the negative of
such number presented. In respect of financial data set out in this
prospectus, a dash (‘‘–’’) signifies that the relevant figure is not
available, while a zero (‘‘0’’) signifies that the relevant figure is
available but has been rounded to or equals zero. Our historical results
are not necessarily indicative of the results that should be expected in
the future, and our interim results are not necessarily indicative of the
results that should be expected for the full year or any other period.
Selected Financial Data
The following table shows selected financial information from our
consolidated statement of profit or loss for the three-month periods
ended March 31, 2015 and March 31, 2014, and the fiscal years
ended December 31, 2014, December 31, 2013, December 31, 2012:
Consolidated Statement of Profit or Loss
Three-month
period ended
March 31,
Year ended December 31,
2015
2014
2014
2013
2012
(in E millions, except as otherwise stated)
(unaudited)
(audited)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.7
196.4
846.0
(199.1) (187.3) (769.4)
743.0
868.0
(658.8) (786.9)
39.6
9.1
76.6
84.2
81.1
(8.5)
(16.2)
(4.2)
(2.4)
(7.5)
(15.9)
(4.2)
21.1
(30.5)
(64.3)
(16.0)
20.6
(28.7)
(58.8)
(13.9)
(36.0)
(34.5)
(66.8)
(18.9)
(18.3)
Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
2.6
(13.6)
(53.2)
(57.4)
Loss from investment in joint venture . . . . . . . . . . . . . . . . . . . . . .
—
(3.5)
(3.5)
(42.5)
(26.6)
Operating profit/(loss) less loss from investment in joint venture . . .
8.3
(0.9)
(17.1)
(95.7)
(84.0)
Interest income and expense, net . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.6)
(1.5)
(0.2)
(0.7)
(1.4)
(6.3)
6.1
(9.5)
5.3
(5.7)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.1)
(0.9)
(7.7)
(3.4)
(0.4)
Profit/(loss) before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2
(1.8)
(24.8)
(99.1)
(84.4)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4.3)
(1.2)
(2.2)
(10.2)
(6.2)
Net profit/(loss) for the period . . . . . . . . . . . . . . . . . . . . . . . . . . .
Of which attributable to Siltronic AG shareholders . . . . . . . . . . . . . .
1.9
3.2
(3.0)
(0.7)
(27.0)
(16.0)
(109.3)
(109.3)
(90.6)
(90.6)
Of which attributable to non-controlling interest . . . . . . . . . . . . . . . .
(1.3)
(2.3)
(11.0)
Profit/(loss) per common share in Euro (basic / diluted) . . . . . . . . .
0.06
(0.01)
(0.32)
Selling expenses . . . . . . . . . . . . . . . . . .
Research and development expenses . . . .
General administration expenses . . . . . .
Other operating income and expense, net
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S-7
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—
(2.19)
—
(1.81)
consolidated statement of financial position as of March 31, 2015
and as of December 31, 2014, December 31, 2013, December 31,
2012:
Consolidated Statement of Financial Position
As of March 31,
2015
(unaudited)
As at December 31,
2014
2013
2012
(in E millions)
(audited)
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611.6
491.9
1,103.5
609.0
461.5
1,070.5
490.7
602.3
1,093.0
634.4
499.5
1,133.9
Equity . . . . . . . . . . . . . . .
Non-current liabilities . . .
Current liabilities . . . . . . .
Liabilities . . . . . . . . . . . .
Total equity and liabilities
197.5
548.3
357.7
906.0
1,103.5
311.8
441.2
317.5
758.7
1,070.5
790.2
212.8
90.0
302.8
1,093.0
748.3
271.4
114.2
385.6
1,133.9
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consolidated cash flow statement for the three-month periods
ended March 31, 2015 and March 31, 2014, and the fiscal years
ended December 31, 2014, December 31, 2013, December 31, 2012:
Consolidated Cash Flow Statement
Three-month
period ended
March 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
(audited)
Cash flow from (used in) operating activities
Cash flow from (used in) investing activities .
Cash flow from (used in) financing activities .
Changes due to exchange-rate fluctuations . .
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Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . .
47.7
87.2 124.7
47.7
(46.2)
(8.1) 18.1 (11.2) (31.3) (105.4)
(33.5) (78.0) 58.6 (13.8) 158.3
4.1
0.1
2.8
(1.6)
(0.4)
10.2
27.4
174.9
1.0
6.3
Other Financial Information and Key Figures
Three-month
period ended
March 31,
2015
2014
Adjusted
Adjusted
Adjusted
Adjusted
Sales . . . . . . . . . . . .
EBITDA . . . . . . . . .
Net Cash Flow . . . . .
Capital Expenditures .
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Significant changes to the
issuer’s financial condition
and operating results
during and subsequent to
the period covered by the
historical key financial
information.
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238.7
40.1
41.9
4.3
203.8
17.1
18.8
6.9
2014
2013
2012
(in E millions)
(unaudited)
853.4
117.7
30.0
40.6
875.5
112.6
72.0
39.7
1,030.0
122.5
(134.6)
144.3
The following significant changes in the Company’s profit for the
period occurred in the three-month period ended March 31, 2015
and in the fiscal years 2014, 2013 and 2012:
In January 2014, the Company acquired control of its subsidiary,
SSW, through a capital increase increasing its total interest in the
subsidiary to 78 percent and leading to its consolidation within the
Group’s results. This has changed the way the sales and costs of
goods sold for SSW are recorded. In addition, we no longer record
a value for investment in joint venture in our operating results.
S-8
Three-month period ended March 31, 2015 and 2014.
Volume of wafer area sold increased and the depreciation of the
Euro boosted sales (the majority of which are in U.S. Dollar)
against costs of goods sold (which are spread more widely across
currencies, including the Euro and Singapore Dollar). These effects
resulted in an operating profit of A 8.3 million and net profit of
A 1.9 million in the first three months of 2015 compared to an
operating profit of A 2.6 million and a net loss of A 3.0 million in the
first three months of 2014.
Fiscal years 2014 and 2013
Sales increased as demand for wafer area continued to grow.
Excluding SSW, which was consolidated for the first time in 2014,
costs of goods sold as a percentage of sales continued to decline
against the previous year. Currency movements contributed to a
reduction in operating loss.
Fiscal years 2013 and 2012
Sales decreased due to lower average selling prices, but cost
reductions and the closure of our production facility in Japan and
the consolidation of production of wafers smaller than 300 mm
contributed to better profit margins in 2013. This contributed to
the reduction in operating loss in 2013.
Recent developments
The exchange rate between the Euro and the U.S. Dollar has
ranged between 1.06 and 1.14 U.S. Dollar per Euro since the end
of March 2015.
B.8
Selected key pro forma
Not applicable. No pro forma financial information has been
prepared by the Company.
B.9
Profit forecast or estimate.
Not applicable. No profit forecast or estimate is being presented by
the Company.
B.10
Qualifications in the audit
report on the historical
Not applicable. The audit opinion on the historical financial
information included in this prospectus has been issued without
qualification.
B.11
Insufficiency of the issuer’s
working capital for its
present requirements.
Not applicable. The Company is of the opinion that the Group is in
a position to meet the payment obligations that become due within
at least the next twelve months.
SECTION C – SECURITIES
C.1
Type and class of the
securities being offered
and/or admitted to
trading.
Ordinary registered shares each with no-par value (Stückaktien),
each with a notional interest in the share capital of the Company of
A 4.00 and full dividend rights from January 1, 2015.
Security identification
number.
International
Securities
Identification
Number
(ISIN):
DE000WAF3001 German Securities Code (Wertpapierkennnummer,
WKN): WAF300
Common Code: 122354644
Ticker Symbol: WAF
C.2
Currency.
Euro.
C.3
The number of shares
issued and fully paid.
As of the date of this prospectus, the share capital of the Company
amounts to A 100,000,000 and is divided into 25,000,000 registered
shares with no-par value (Stückaktien). The conversion of the
S-9
former no par value bearer shares into no par value registered
shares took effect upon registration of the amendment to the
articles of association in the commercial register on May 11, 2015.
The Company’s stated share capital has been fully paid up. All
shares of the Company will be fully paid up.
The Company’s shares will be represented by one or more global
share certificates (the ‘‘Global Share Certificate’’), which will be
deposited with Clearstream Banking Aktiengesellschaft,
Mergenthalerallee 61, 65760 Eschborn, Germany.
Notional value.
Each share of the Company represents a notional share of A 4.00 in
the Company’s share capital.
C.4
A description of the rights
attached to the securities.
Each share of the Company carries one vote at the Company’s
shareholders’ meeting. There are no restrictions on voting rights.
The Company’s shares carry full dividend rights as from January 1,
2015.
C.5
A description of any
restrictions on the free
transferability of the
securities.
Not applicable. The Company’s shares as offered and transferred
to investors are freely transferable in accordance with the legal
requirements for ordinary registered shares.
C.6
Application for admission
to trading on a regulated
market and identity of
regulated markets where
the securities are to be
traded.
The Company will apply for admission of the Company’s shares
(including the New Shares) to trading on the regulated market
segment (regulierter Markt) of the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) and, simultaneously, to the
sub-segment thereof with additional post-admission obligations
(Prime Standard) on or about June 1, 2015. The listing approval for
the Company’s shares is expected to be granted on June 10, 2015.
Trading in the Company’s shares on the Frankfurt Stock Exchange
is planned to commence on June 11, 2015.
C.7
Dividend policy.
We currently intend to prioritize the support of our operations and
planned investments in our business. We may pay a dividend to
distribute excess funds that we do not intend to use for investment
or need as a capital reserve to fund ongoing operations. Any future
payment of dividends will be made in accordance with applicable
laws and will depend upon, among other factors, our results of
operations, financial condition, contractual restrictions and capital
requirements.
SECTION D – RISKS
D.1
Key risks specific to the
issuer and its industry.
An investment in the Company’s shares is subject to a number of risks.
The following is a sample of key risks and uncertainties that could
materially adversely affect our business, financial condition and results
of operations. The market price of the Company’s shares could fall if
such risks were to materialize, in which case prospective investors
could lose all or part of their investment.
The order in which the following risks are presented here is not an
indication of the likelihood of these risks actually materializing, or
their likely significance or degree, or the scope of any potential harm to
our business, financial condition, or results of operations that might
result.
Risks Related to Our Business
•
Our business depends on the semiconductor device industry,
the volatile and cyclical nature of which can significantly
change the utilization of production capacities for
S-10
semiconductor silicon wafers and we could be forced to reduce
our prices without being able to reduce costs, including fixed
costs which could materially adversely affect our business, net
assets, financial condition and results of operations.
•
Declining or volatile average selling prices and downward
price pressure created by over-capacity in the semiconductor
silicon wafer industry could materially adversely affect our
business, net assets, financial condition and results of
operations.
•
The technological processes used in the semiconductor and
semiconductor silicon wafer industries are subject to rapid
changes and we may be unable to react appropriately and
quickly enough which could affect our market position and
could materially adversely affect our business, net assets,
financial condition and results of operations.
•
In the future, we may not be able to generate sufficient cash or
draw upon other sources of capital to fund our day-to-day
operations, finance our capital expenditures and service any
indebtedness we may acquire which could materially adversely
affect our business, net assets, financial condition and results
of operations.
•
Potentially experiencing a significant reduction in, or loss of,
purchases or failure to pay by any of our top customers could
materially adversely affect our business, net assets, financial
condition and results of operations.
•
Polysilicon, other ancillary materials, machinery and
replacement parts, are offered by only a limited number of
suppliers, exposing us to risk of delivery disruptions and price
increases which could materially adversely affect our business,
net assets, financial condition and results of operations.
•
We are subject to risks in relation to exchange rate fluctuations
which impact both our reported sales and our margins, and
adverse changes in the U.S. Dollar or the Japanese Yen
exchange rates could materially adversely affect our business,
•
We face intense competition within our industry and our
competitors may introduce new wafer generations and
specifications faster than we do, at lower prices or with better
performance characteristics, or may manage to reduce their
costs at a greater rate than we do, or benefit from support
from corporate parents, any of which could materially
adversely affect our business, net assets, financial condition
and results of operations.
•
We are subject to environmental laws and regulations, which
could require us to incur environmental liabilities or increase
our manufacturing and related compliance costs, etc., which
could materially adversely affect our business, net assets,
•
We are exposed to litigation risks from time to time and an
adverse ruling or expensive legal proceeding could materially
adversely affect our business, net assets, financial condition
and results of operations.
S-11
D.3
Key risks specific to the
securities.
Risks Related to the Company’s Shares and the Offering
•
Following the Offering, our existing shareholders will retain a
significant interest in the Company and their interests may
conflict with those of our other shareholders.
•
Our ability to pay dividends depends, among other things, on
our financial condition and results of operations.
•
Siltronic’s shares have not previously been publicly traded, and
there is no guarantee that an active and liquid market for
shares in the Company will develop.
•
Siltronic’s share price could fluctuate significantly, and
investors could lose all or part of their investment.
•
Future sales by our existing shareholders could depress the
price of Siltronic’s shares.
SECTION E – OFFER
E.1
The total net proceeds.
The Company will receive the proceeds of the Offering (as defined
below in E.3) resulting from the sale of the New Shares (as defined
below in E.3) after deduction of fees and commissions. The Selling
Shareholder (as defined below in E.3) will receive the proceeds of
the Offering resulting from the sale of Existing Shares and any
Over-Allotment Shares (as defined below in E.3) sold in
connection with the Greenshoe Option (as defined below in E.3)
after deduction of fees and commissions.
We intend to issue up to 5,000,000 New Shares (as defined below in
E.3) to achieve gross proceeds of approximately A 150 million. This
is equal to 5,000,000, 4,411,765 and 3,947,368 New Shares at the
lower end, mid-point and upper end, respectively, of the price
range set for the offering of the Offer Shares (the ‘‘Price Range’’).
Based on gross proceeds of A 150 million, we estimate net proceeds
of the Offering (as defined below in E.3) attributable to the
Company will amount to approximately A 143.2 million at the
mid-point of the Price Range. The extraordinary shareholders’
meeting of the Company will use its best judgment as to the
number of New Shares to be issued when it resolves the IPO
Capital Increase in order to achieve gross proceeds for the
Company of approximately A 150 million; however, because the
IPO Capital Increase will be registered prior to setting the Offer
Price (as defined below in E.3), the exact amount of gross proceeds
could be significantly above or below A 150 million. Assuming a
placement at the mid-point of the Price Range of the Existing
Shares as well as the exercise of the Greenshoe Option
representing 15 percent of the Base Shares sold, or 1,561,765
Shares at the mid-point of the Price Range (all as defined below in
E.3), the total net proceeds of the Offering (as defined below in
E.3) attributable to the Selling Shareholder (as defined below in
E.3) will amount to approximately A 245.4 million.
Estimate of the total
expenses of the offering
and listing, including
estimated expenses
charged to the investor by
the issuer.
The expenses related to the Offering (as defined below in E.3) and
the listing of the Company’s shares will be borne by the Company
and the Selling Shareholder (as defined below in E.3) pro rata in
relation to the total number of Offer Shares (as defined below in
E.3) and are expected to total approximately A 5.3 million
(excluding underwriting and placement commissions payable to the
Underwriters).
Assuming (i) placement of 4,411,765 New Shares (resulting in gross
proceeds for the Company of approximately A 150 million) and the
S-12
Existing Shares (all as defined in E.3 below) at the mid-point of the
Price Range, (ii) full exercise of the Greenshoe Option (as defined
below in E.3), and (iii) payment in full of the discretionary fee of
up to A 4.1 million, the commissions and expenses payable to the
Underwriters will amount to A 13.2 million.
Based on the assumptions described in the preceding paragraph,
the total amount of expenses of the Offering (as defined below in
E.3) and listing of the Company’s shares (including the commission
payable to the Underwriters) to be borne by the Company are
expected to amount to A 6.8 million.
Investors will not be charged expenses by the Company or the
Underwriters.
E.2a
Reasons for the offering.
The Company intends to (i) sell the New Shares to refinance its
debt (amounts outstanding under its A 150 million credit facility
used to fund its ongoing operations and planned capital
investments) and (ii) list the Company’s shares on the regulated
market segment (regulierter Markt) of the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) and, simultaneously, on the
sub-segment thereof with additional post-admission obligations
(Prime Standard) to achieve better access to the capital markets.
Use of proceeds, estimated
net amount of the
proceeds.
The Company intends to use the net proceeds from this offering to
repay its credit facility used to fund the operations of the Company
as well as for general corporate purposes. We may also use a
portion of the net proceeds to invest in capabilities, equipment or
technologies, including our debottlenecking plans.
The Company will receive the proceeds of the Offering (as defined
below in E.3) resulting from the sale of the New Shares after
deduction of fees and commissions. The Selling Shareholder will
receive the proceeds of the Offering (as defined below in E.3) from
the sale of Existing Shares (as defined below in E.3), including
Over-Allotment Shares (as defined below in E.3) sold in
connection with the exercise of the Greenshoe Option (as defined
below in E.3), in each case after deduction of fees and
commissions. The Company intends to issue and sell such number
of New Shares as will result in gross proceeds attributable to the
Company of approximately A 150 million corresponding to net
proceeds for the Company of A 143.2 million. The receipt of such
proceeds will correspond to a placement of 4,411,765 New Shares
at the mid-point of the Price Range. Assuming full exercise of the
Greenshoe Option (as defined below in E.3) and a placement of
the Existing Shares based on an Offer Price at the mid-point of the
Price Range, the Selling Shareholder expects to receive gross
proceeds of approximately A 257.1 million in the Offering (as
defined below in E.3); net proceeds thereof attributable to the
Selling Shareholder will amount to approximately A 245.4 million.1
E.3
Offer conditions.
This offering relates to 12,650,000 of the Company’s ordinary
registered shares with no-par value (Stückaktien), each such
Company’s share representing a notional value of A 4.00 and with
full dividend rights from January 1, 2015 (the ‘‘Offering’’),
consisting of:
•
1
5,000,000 newly issued ordinary registered shares with no-par
value (Stückaktien) (the ‘‘New Shares’’) from a capital increase
against contribution in cash expected to be resolved by an
Depending on the share price and the number of shares placed in the offering, both the absolute amounts and the relative sizes
of the proceeds to the Company and Selling Shareholder can vary.
S-13
extraordinary shareholders’ meeting of the Company on
June 8, 2015 (the ‘‘IPO Capital Increase’’);
•
6,000,000 existing ordinary registered Siltronic AG shares with
no-par value (Stückaktien) from the holdings of WackerChemie Dritte Venture GmbH (the ‘‘Selling Shareholder’’)
(the ‘‘Existing Shares’’ and together with the New Shares, the
‘‘Base Shares’’); and
•
1,650,000 existing ordinary registered Siltronic AG shares with
no-par value (Stückaktien) from the holdings of the Selling
Shareholder in connection with a potential over-allotment (the
‘‘Over-Allotment Shares’’ and, together with the Base Shares,
the ‘‘Offer Shares’’).
The Offering consists of initial public offerings in the Federal
Republic of Germany (‘‘Germany’’) and the Grand Duchy of
Luxembourg and private placements in certain jurisdictions outside
Germany and the Grand Duchy of Luxembourg. In the United
States of America (the ‘‘United States’’), the Company’s shares will
be offered and sold only to qualified institutional buyers as defined
in Rule 144A under the United States Securities Act of 1933, as
amended. Outside the United States, the Company’s shares will be
offered and sold only in offshore transactions in reliance on
Regulation S under the United States Securities Act of 1933, as
amended.
Offer Period.
The period during which investors may submit purchase orders for
the Offer Shares is expected to begin on June 1, 2015, and is
expected to end on June 10, 2015 (the ‘‘Offer Period’’). On the last
day of the Offer Period, offers to purchase may be submitted
(i) until 12:00 noon (Central European Summer Time) (‘‘CEST’’)
by private investors and (ii) until 14:00 (CEST) by institutional
investors.
Price Range.
The Price Range within which purchase orders may be placed is
A 30.00 to A 38.00 per Offer Share.
Offer Price.
The placement price (the ‘‘Offer Price’’) and the final number of
Offer Shares to be placed in the Offering have not yet been fixed as
of the date of this prospectus and will be set jointly by the Company
and the Joint Bookrunners on June 10, 2015 on the basis of the
purchase orders submitted by investors that have been collated in
the order book prepared during a bookbuilding process. The Offer
Price and the final number of Offer Shares placed in the Offering
(i.e., the results of the Offering) are expected to be published on
the same date by means of an ad-hoc release through an electronic
information dissemination system and on the Company’s website.
Should the placement volume prove insufficient to satisfy all orders
placed at the Offer Price, the Underwriters reserve the right to
reject orders, or to accept them in part only.
Delivery and Payment.
The delivery of the Offer Shares against payment of the Offer Price
is expected to take place on June 15, 2015. The Offer Shares will be
made available to the shareholders as co-ownership interests in the
Global Share Certificate.
Preferential Allocation
Both members of our management board (the ‘‘Management
Board’’) will receive shares in the Offering through preferential
allocation. The members of the Management Board will, in the
aggregate, receive Offer Shares for a total consideration of
A 102,000 (3,000 Offer Shares at the mid-point of the Price Range).
S-14
Stabilization Measures,
Over-Allotment and
Greenshoe Option.
In connection with the placement of the Offer Shares, Citigroup
Global Markets Limited, London, United Kingdom, acting for the
account of the Underwriters, will act as the stabilization manager
(the ‘‘Stabilization Manager’’) and may, as Stabilization Manager
acting in accordance with legal requirements (Section 20a para. 3
of the German Securities Trading Act (Wertpapierhandelsgesetz) in
conjunction with Commission Regulation (EC) No. 2273/2003 of
December 22, 2003), make over-allotments and take stabilization
measures to support the market price of the Company’s shares and
thereby counteract any selling pressure.
Under the possible stabilization measures, investors may, in
addition to the New Shares, be allocated up to 1,650,000
Over-Allotment Shares as part of the allocation of the Offer Shares
(‘‘Over-Allotment’’). For the purposes of the Over-Allotment, Citi
will be provided with up to 1,650,000 shares (a number not to
exceed 15 percent of the Base Shares) from the holdings of the
Selling Shareholder in the form of a securities loan. In addition, the
Selling Shareholder will grant the Underwriters an option to
acquire the borrowed shares at the Offer Price less agreed
commissions (the ‘‘Greenshoe Option’’). The Greenshoe Option
will terminate 30 calendar days after the first day of trading. The
Underwriters are entitled to exercise the Greenshoe Option to the
extent Over-Allotments were initially made. The amount of shares
is to be reduced by the number of shares held by the stabilization
manager as of the date on which the Greenshoe Option is exercised
and that were acquired by the stabilization manager in the context
of stabilization measures.
Once the Stabilization Period has ended, an announcement will be
made with details on stabilization measures taken. Exercise of the
Greenshoe Option, the timing of its exercise and the number and
type of shares concerned will also be announced promptly.
E.4
Interests material to the
listing including
conflicting interests.
We are not aware of any conflicting interests.
In connection with the Offering and the admission to trading of the
Company’s shares, the Underwriters have entered into a
contractual relationship with the Company.
The Underwriters act for the Company on the Offering and
coordinate the structuring and execution of the Offering. Upon
successful implementation of the Offering, the Underwriters will
receive a commission. The Underwriters have a personal financial
interest in the success of the Offering as a result of these
contractual relationships.
The Selling Shareholder will offer the shares to partially divest its
shareholding in the Company. The Selling Shareholder, and its
parent company, Wacker Chemie AG, will receive proceeds from
the Offering. Assuming full exercise of the Greenshoe Option
Selling Shareholder’s share will amount to 63.2 percent of the gross
proceeds at the mid-point of the Price Range. We intend to use the
net proceeds we receive from the Offering to refinance amounts
outstanding under a A 150 million credit facility granted by Wacker
Chemie AG. The Selling Shareholder and Wacker Chemie AG
therefore have a financial interest in the Offering.
Immediately prior to the Offering, the members of the
Management Board did not hold any of the Company’s shares. The
members of the Management Board will receive, in the aggregate,
S-15
Offer Shares for a total consideration of A 102,000 (3,000 Offer
Shares at the mid-point of the Price Range).
E.5
Name of the person or
entity offering to sell the
security.
The Company’s shares are being offered for sale by the
Underwriters.
Lock-up agreement: the
parties involved; and
indication of the period of
the lock-up.
We, Wacker Chemie AG and Wacker-Chemie Dritte
Venture GmbH have agreed that, without the prior written consent
of Citi and Credit Suisse on behalf of the Underwriters, we and
they will not (subject to certain exceptions), during the period
ending 180 days after the date of this prospectus:
•
offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any ordinary
shares or any other securities convertible into or exercisable or
exchangeable for ordinary shares; or
•
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic
consequences of ownership of the ordinary shares;
whether any transaction described above is to be settled by delivery
of our ordinary shares or such other securities, in cash or otherwise.
E.6
Amount and percentage of
immediate dilution
resulting from the offering.
The net book value of the Company amounted to A 167.5 million as
of March 31, 2015, and would amount to A 6.70 per share based on
25,000,000 outstanding shares of the Company existing immediately
prior to the issuance of the New Shares.
The dilutive effect of the Offering is illustrated in the table below
demonstrating the amount by which the mid-point of the Price
Range exceeds the net book value of the Company per share after
completion of the Offering. This calculation is made assuming
4,411,765 New Shares are placed at the mid-point of the Price
Range resulting in gross proceeds of approximately A 150 million
and net proceeds of A 143.2 million. In this respect, the equity
attributable to shareholders is adjusted for the effects of the
issuance of all the New Shares and the placement thereof resulting
in an assumed increase in the net book value of the Company of
A 143.2 million. The assumed increase is based on the expected net
proceeds. The adjusted net book value is expressed as a per share
figure, assuming 29,411,765 outstanding shares of the Company
upon completion of the Offering (this per share figure being
referred to as ‘‘Post-IPO net book value per share in the
Company’’).
Price per share in the Company (in A; based on the mid-point of
the Price Range) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net book value per share in the Company as of March 31, 2015
(assuming 25,000,000 outstanding shares immediately prior to
the issuance of the New Shares) (in A) . . . . . . . . . . . . . . . .
Post-IPO net book value per share in the Company (in A) . . . . .
Amount by which the Offer Price per Company’s share exceeds
the Post-IPO net book value per share in the Company
(immediate dilution per share) (in A) . . . . . . . . . . . . . . . . .
Immediate dilution (per share) (in %) . . . . . . . . . . . . . . . . . .
E.7
Estimated expenses
charged to the investor by
the issuer.
34.00
6.70
10.56
23.44
68.9
Not applicable. Investors will not be charged expenses by the
Company or the Underwriters.
S-16
ZUSAMMENFASSUNG DES PROSPEKTS
Zusammenfassungen bestehen aus geforderten Angaben, die als Punkte („Punkte‘‘) bezeichnet sind. Diese
Punkte sind in den Abschnitten A – E (A.1 – E.7) fortlaufend nummeriert. Diese Zusammenfassung enthält
alle Punkte, die für die vorliegende Art von Wertpapier und Emittent in eine Zusammenfassung aufzunehmen
sind. Da einige Punkte nicht behandelt werden müssen, können in der Nummerierungsreihenfolge Lücken
auftreten. Selbst wenn ein Punkt wegen der Art des Wertpapiers und des Emittenten in die Zusammenfassung
aufgenommen werden muss, ist es möglich, dass in Bezug auf diesen Punkt keine relevanten Informationen
gegeben werden können. In solchen Fällen enthält die Zusammenfassung eine kurze Beschreibung des Punkts
mit dem Hinweis „Entfällt‘‘.
ABSCHNITT A – EINLEITUNG
A.1
UND
WARNHINWEISE
Warnhinweise.
Diese Zusammenfassung sollte als Einleitung zu diesem Prospekt
verstanden werden.
Jede Entscheidung zur Anlage in die Wertpapiere sollte sich auf
eine Prüfung des gesamten Prospekts durch den Anleger stützen.
Für den Fall, dass vor einem Gericht Ansprüche auf Grund der in
diesem Prospekt enthaltenen Informationen geltend gemacht
werden, könnte der als Kläger auftretende Anleger in Anwendung
der einzelstaatlichen Rechtsvorschriften der Staaten des
Europäischen Wirtschaftsraums („EWR‘‘) die Kosten für die
Übersetzung des Prospekts vor Prozessbeginn zu tragen haben.
Diejenigen Personen, die für die Zusammenfassung einschließlich
ihrer Übersetzung die Verantwortung übernommen haben oder
von denen der Erlass ausgeht, können haftbar gemacht werden,
jedoch nur für den Fall, dass die Zusammenfassung irreführend,
unrichtig oder widersprüchlich ist, wenn sie zusammen mit den
anderen Teilen dieses Prospekts gelesen wird, oder sie, wenn sie
zusammen mit den anderen Teilen dieses Prospekts gelesen wird,
nicht alle erforderlichen Schlüsselinformationen vermittelt.
Die Siltronic AG (die „Gesellschaft‘‘ und, zusammen mit ihren
konsolidierten Tochtergesellschaften, „wir‘‘, „uns‘‘, „unsere‘‘, die
„Gruppe‘‘, die „Siltronic-Gruppe‘‘ oder „Siltronic‘‘) mit (Sitz) am
Hanns-Seidel-Platz 4, 81737 München, Deutschland, zusammen mit
Credit Suisse Securities (Europe) Limited, London, Vereinigtes
Königreich („Credit Suisse‘‘) und Citigroup Global Markets
Limited, London, Vereinigtes Königreich („Citi‘‘ und Credit Suisse
zusammen die „Joint Global Coordinators‘‘ und ‘‘Joint
Bookrunners’’) und COMMERZBANK Aktiengesellschaft,
Frankfurt, Deutschland (‘‘COMMERZBANK’’), UniCredit Bank
AG, München, Deutschland (‘‘UniCredit Bank AG’’) und HSBC
Trinkaus & Burkhardt AG Düsseldorf, Deutschland (‘‘HSBC
Germany’’ und, zusammen mit COMMERZBANK und UniCredit
Bank AG, die ‘‘Co-Lead Managers’’ und zusammen mit den Joint
Bookrunners die ‘‘Konsortialbanken’’) haben nach § 5 Abs. 2b Nr. 4
Wertpapierprospektgesetz die Verantwortung für den Inhalt dieser
Zusammenfassung und ihrer deutschen Übersetzung übernommen.
A.2
Angabe über spätere
Verwendung des Prospekts.
Entfällt. Eine Zustimmung der Gesellschaft zur Verwendung dieses
Prospekts für eine spätere Weiterveräußerung oder endgültige
Platzierung der Aktien der Gesellschaft durch Finanzintermediäre
wurde nicht erteilt.
ABSCHNITT B – EMITTENT
B.1
Juristische und
kommerzielle Bezeichnung.
Die juristische Bezeichnung der Gesellschaft ist „Siltronic AG‘‘.
Die Gruppe betreibt ihre Geschäfte hauptsächlich unter der
kommerziellen Bezeichnung „Siltronic‘‘.
S-17
B.2
Sitz und Rechtsform des
Emittenten, anwendbares
Recht, Land der
Gründung.
Die Gesellschaft hat ihren satzungsmäßigen Sitz am Hanns-SeidelPlatz 4, 81737 München, Deutschland, und ist im Handelsregister
des Amtsgerichts München, Deutschland (das „Handelsregister‘‘),
unter HRB 150884 eingetragen. Die Gesellschaft ist eine
deutschem Recht unterliegende deutsche Aktiengesellschaft.
B.3
Derzeitige Geschäfts- und
Haupttätigkeit sowie
Hauptmärkte, auf denen
der Emittent vertreten ist.
Überblick über unser Geschäft
Wir sind nach Angaben des Marktforschungsinstituts Gartner Inc.
(„Gartner‘‘) der weltweit drittgrößte Hersteller von Wafern aus
Reinstsilicium für die Halbleiterindustrie mit einem weltweilten
Marktanteil von 14 Prozent im Jahr 2013. Seit mehr als einem
halben Jahrhundert ist Reinstsilicium der Rohstoff der Wahl in der
Mikroelektronik und den dort eingesetzten Wafern. Silicium ist die
Basis für fast alle Halbleiterbauelemente und bildet damit im
Wesentlichen die Grundlage für die gesamte weltweite
Elektronikindustrie. Unser Geschäft hat seinen Ursprung in der
Forschung und Entwicklung im Bereich Reinstsilicium, die wir im
Jahr 1953 begonnen haben. Es besteht in seiner gegenwärtigen
Form, der Siltronic AG, seit dem Jahr 2004. Nach der Entwicklung
des ersten Siliciumwafer für die Halbleiterindustrie im Jahr 1962
haben wir schnell die Möglichkeiten und guten Perspektiven
erkannt, die sich in der Halbleiterindustrie zeigten und haben
strategisch in diese Technologie investiert.
Wafer aus hochreinem Silicium für die Halbleiterindustrie werden
für immer kleinere Strukturen verwendet, die auch als „Design
Rules‘‘ bezeichnet werden, und heute im Bereich von wenigen
Nanometern (gemessen in Milliardstel Meter) liegen. Dies
ermöglicht die Produktion von immer leistungsfähigeren und
energieeffizienteren Generationen von Computerchips. Unsere
Siliciumwafer für die Halbleiterindustrie unterstützen diese
Entwicklung und bilden die Grundlage für hoch komplexe
Halbleiterbauelemente, z.B. für Hochspannungsanwendungen,
niedrigohmige Schaltkreise für den Automobilbau und die
Telekommunikation sowie hoch integrierte Mikroprozessoren und
Speicherbauelemente für die Informationsverarbeitung. Daher sind
unsere Siliciumwafer in zahlreichen Gegenständen des täglichen
Gebrauchs wie Mobiltelefonen, Laptops, Autos und in vielen
anderen Konsumgütern zu finden.
Mit unserem umfangreichen Produktportfolio bedienen wir alle
20 führenden Verbraucher von Siliciumwafern für die
Halbleiterindustrie und unterhalten mit allen unseren wichtigen
Kunden über viele Jahre gewachsene Geschäftsbeziehungen. Im
Jahr 2014 waren unsere fünf größten Kunden, in alphabetischer
Reihenfolge, Infineon Technologies, Intel Corporation, Micron
Technology, Samsung Electronics, und Taiwan Semiconductor
Manufacturing Company (TSMC). Wir produzieren unsere
qualitativ hochwertigen Wafer in unserem multinationalen
Netzwerk von Produktionsstätten in den Vereinigten Staaten,
Europa und Asien. Alle Standorte liegen strategisch günstig in der
Nähe unserer Kunden und haben Zugang zu sehr gut ausgebildeten
Arbeitskräften. Wir sind der Meinung, unseren Kunden mit jeweils
einer lokalen Anlaufstelle, die aber unser gesamtes
Produktportfolio abdeckt, den qualitativ hochwertigsten
Kundenservice zu bieten. Unser Ziel ist es, Wafer mit den
Qualitäten und Spezifikationen zu liefern, die die Anforderungen
unserer Kunden immer erfüllen oder sogar übertreffen.
S-18
Unser Anspruch ist es, eine treibende Kraft für Innovationen bei
Siliciumwafern für die Halbleiterindustrie zu sein. Wir arbeiten
sehr eng mit unseren Kunden zusammen, um deren Produkte und
Lösungen fortwährend zu verbessern und weiterzuentwickeln.
Hierzu fertigen wir polierte und epitaxierte Wafer gemäß den
aktuellsten Design Rules, wie sie von unseren Kunden spezifiziert
werden. Beispielsweise arbeiten wir gegenwärtig gemeinsam mit
unseren Kunden daran, die nächste, gemeinhin als „11nm‘‘
bezeichnete Design Rule am Markt einzuführen. Zudem haben wir
bereits im Jahr 2013 mit der Entwicklung der darauf folgenden,
gemeinhin als „8nm‘‘ bezeichneten Design Rule begonnen, deren
Marktreife für 2017 anvisiert ist. Wir haben uns der Vision
verschrieben „eine Generation voraus zu sein‘‘. Darüber hinaus
beherrschen wir das führende Zonenziehverfahren (die „FZ‘‘Technologie) für Wafer mit einem Durchmesser von bis zu 200 mm.
Dieses Verfahren ermöglicht die Herstellung von Wafern mit
extrem gleichmäßigen elektrischen Widerstandseigenschaften und
von Wafern für Hochspannungsanwendungen.
Auf der Basis unserer langjährigen Erfahrung in der Herstellung
von 300 mm Wafern haben wir unsere modernen
Produktionsanlagen in Freiberg (Sachsen) und in Singapur
errichtet, die beide für die Massenproduktion von 300 mm Wafern
ausgelegt sind. An unseren Standorten in Singapur betreiben wir
Produktionsanlagen für 200 und 300 mm Wafer, die jeweils zu den
modernsten und größten der Welt zählen. Am 24. Januar 2014
haben wir unseren Eigentumsanteil am Joint Venture mit Samsung
erhöht, das in Singapur 300 mm Wafer herstellt. Damit haben wir
die vollständige operative Kontrolle in dieser Gesellschaft
übernommen. Unsere weltweite Präsenz ermöglicht uns jederzeit
und überall auf der Welt in weniger als 24 Stunden auf
Kundenanfragen zu reagieren und zudem erreichen wir eine
nahezu 100-prozentige Termintreue bei der Belieferung unserer
Kunden. Dies stärkt unsere enge Zusammenarbeit mit unseren
Kunden beim Design und der Entwicklung von Produkten.
In den vergangenen Jahren haben wir unsere Effizienz erheblich
gesteigert und gleichzeitig unsere Kosten deutlich gesenkt. Mit
unserem kontinuierlichen Kostensenkungsprogramm („Roadmap‘‘)
haben wir unsere Kosten im Jahr 2013 gegenüber dem Vorjahr um
über 80 Mio. Euro vermindert (unter Anwendung der Kostenbasis
von 2012 für die Mengen und andere wirtschaftliche und vereinbarte
Annahmen (z.B. 2012 Lohnstückkosten) von 2013 und ohne
Einbeziehung von Siltronic Silicon Wafer Pte. Ltd. („SSW‘‘)).
Darüber hinaus haben wir im Jahr 2014 gegenüber 2013 weitere
Einsparungen von ca. 55 Mio. Euro erzielt (unter Anwendung der
Kostenbasis von 2013 auf die Mengen und andere wirtschaftliche und
vereinbarte Annahmen (z.B. 2013 Lohnstückkosten) von 2014 und
unter Einbeziehung von SSW ab dem 24. Januar 2014). Dadurch hat
sich unser negatives Betriebsergebnis vermindert und unser
angepasstes* EBITDA war nahezu stabil in den letzten drei Jahren —
es entwickelte sich von 122,5 Mio. Euro in 2012 abfallend auf 112,6
Mio. Euro in 2013 und im Vergleich zu 2013 leicht ansteigend auf
*
Der Begriff ‘‘angepasst’’ (adjusted), so wie er im Hinblick auf Finanzkennzahlen wie angepasste Umsatzerlöse, angepasstes
EBITDA, angepasster Netto-Cashflow und angepasste Investitionen verwandt wird, bezieht sich auf veranschaulichende
aggregierte Anpassungen, die zum einen nicht in Übereinstimmung mit IFRS oder allgemein anerkannten
Bilanzierungsgrundsätzen erstellt worden sind und zum anderen SSW berücksichtigen, ohne dabei etwas über eine
Konsolidierung nach IFRS auszusagen. Ferner bezieht sich der Begriff ,,angepasst’’ nicht auf Pro-Forma-Finanzinformationen
oder konsolidierte Finanzinformationen, die mit den Finanzinformationen der Gesellschaft vergleichbar wären, die in
Übereinstimmung mit IFRS erstellt wurden.
S-19
117,7 Mio. Euro in 2014 — obwohl das Marktumfeld von
niedrigem Wachstum geprägt war, was durch fallende Preise und
zunehmenden Wettbewerb noch verschärft worden ist.
Im ersten Quartal 2015 verzeichneten wir einen Umsatz von
238,7 Mio. Euro (keine Anpassung), einen Periodengewinn von
1,9 Mio. Euro und ein EBITDA von 40,1 Mio. Euro (keine
Anpassung). In 2014 verzeichneten wir einen Umsatz von 846,0
Mio. Euro (angepasster Umsatz von 853,4 Mio. Euro), einen
Jahresfehlbetrag von 27,0 Mio. Euro und ein angepasstes EBITDA
von 117,7 Mio. Euro. 2013 verzeichneten wir einen Umsatz von
743,0 Mio. Euro (einen die SSW berücksichtigenden angepassten
Umsatz von 875,5 Mio. Euro), einen Jahresfehlbetrag von
109,3 Mio. Euro und ein die SSW berücksichtigendes angepasstes
EBITDA von 112,6 Mio. Euro. Für das am 31. Dezember 2012
endende Geschäftsjahr verzeichneten wir einen Umsatz von 868,0
Mio. Euro (einen die SSW berücksichtigenden angepassten
Umsatz von 1.030,0 Mio. Euro), einen Jahresfehlbetrag von 90,6
Mio. Euro und ein die SSW berücksichtigendes angepasstes
EBITDA von 122,5 Mio. Euro.
Überblick über die Industrie
Halbleiterbauelemente sind ein Kernelement der modernen
Elektronik. Sie ermöglichen die laufende Verbesserung von
Funktionen und Eigenschaften. Siliciumwafer bilden die Grundlage
für den größten Teil der weltweiten Produktion von
Halbleiterbauelementen. Angaben von Gartner zufolge lag das
Gesamtvolumen des weltweiten Halbleitermarkts im Jahr 2013 bei
315 Mrd. US-Dollar. Zu Halbleiterbauelementen gehören unter
anderem Mikroprozessoren, Speicherelemente, sowie integrierte
Schaltkreise für Analog-, Misch- und RF-Signale, diskrete,
anwendungsspezifische integrierte Schaltkreise, mikromechanische
Systeme (MEMS) und Bildsensoren. Alle diese Bauelemente
benötigen Halbleiter, die energieeffizient, kostengünstig, sehr
leistungsfähig und hoch integriert sind. Halbleiterbauelemente, die
diese Eigenschaften haben, verlangen in zunehmendem Maße
sowohl polierte als auch epitaxierte Wafer der neusten Generation
aus hochreinem Silicium.
Der Anstieg der Nachfrage nach Siliciumwafern für die
Halbleiterindustrie in jüngerer Zeit ist überwiegend der
Verbreitung mobile Endgeräte, wie Smartphones, zuzuschreiben.
Zusätzlich zur steigenden Anzahl von mobile Endgeräten wird
erwartet, dass neue Märkte und Anwendungsbereiche im
Gesundheitswesen, im Automobilbau und in der Industrie
zukünftig für steigende Nachfrage nach Siliciumwafern in der
Halbleiterindustrie sorgen. All diese Bereiche integrieren
zunehmend fortschrittliche Technologien in ihre Angebote und
Produkte. Beispiele hierfür sind die weit verbreitete Nutzung von
halbleiterbasierten Festplatten, sogenannten Solid State Disks
(SSD), „Flash‘‘ Speicher in PCs, Laptops und Tablets, die steigende
Nachfrage nach der Verarbeitung von immer größeren
Datenmengen in immer mehr Anwendungen und Industrien (auch
bekannt als „Big Data‘‘), sowie die wachsende und ständige
Verfügbarkeit von Daten an allen Orten zusammen mit dem
Ansatz, alles mit allem zu verbinden (auch als „Internet of Things‘‘
bekannt). Alle diese Entwicklungen beinhalten ein erhebliches
Potenzial für das weitere Wachstum der Nachfrage im
Halbleiterbereich. Gartner erwartet, dass die weltweite Menge an
Siliciumwafern für die Halbleiterindustrie, gemessen in Millionen
S-20
Quadratzoll, von 2013 bis 2018 mit einer
Wachstumsrate von ca. 5 Prozent pro Jahr wächst.
kumulierten
Ebenfalls haben wir laut Gartner einen umsatzbezogenen
Marktanteil von 14 Prozent, wobei die Top-5 Lieferanten von
Siliciumwafern für die Halbleiterindustrie zusammen ungefähr
88 Prozent des Gesamtumsatzes mit Siliciumwafern im Jahr 2013
ausmachen. Darüber hinaus haben die beiden größten Hersteller
seit 2008 mit einem Minus von jeweils etwa 6 Prozent deutlich an
Marktanteil verloren, wohingegen wir und zwei unserer kleineren
Wettbewerber jeweils 3 Prozent Marktanteil gewonnen haben.
Unsere Stärken
Unseres Erachtens zeichnet sich unser Geschäft durch die
folgenden Wettbewerbsstärken aus, die unseren bisherigen Erfolg
ermöglicht haben und uns auch in Zukunft von unseren
Wettbewerbern unterscheiden werden:
•
Starke Marktposition als Hersteller von Siliciumwafer für die
Halbleiterindustrie
•
Führend bei Technologie und Qualität
•
Lieferant für alle Top-20 Halbleiterhersteller mit langjährigen,
etablierten Geschäftsbeziehungen
•
Umfangreiche Erfolge
Kostensenkung
•
Gesicherte Versorgung mit hochwertigem Polysilicium zu
wettbewerbsfähigen Preisen
•
Erfahrenes
Managementteam
Arbeitskräfte
bei
Effizienzverbesserung
und
und
hochqualifizierte
Unsere Strategie
Unsere Strategie ist es, unsere Position als einer der führenden
Hersteller in der großen und wachsenden Industrie für
Halbleiterwafer zu nutzen und weiter zu stärken. Die
Kernelemente unserer Strategie sind:
B.4a
Wichtigste jüngste Trends,
die sich auf den
Emittenten und die
Branchen, in denen er
tätig ist, auswirken.
•
Von der wachsenden Nachfrage für Siliciumwafer in der
Halbleiterindustrie zu profitieren
•
Unsere
Technologieführerschaft
auszubauen
•
Unser Programm für operative Exzellenz und Kostensenkung
fortzusetzen
•
Unsere Qualitätsführerschaft aufrecht zu erhalten
•
Uns auf Verbesserungen im Geschäftsergebnis und den
Mittelzufluss aus dem operativen Geschäft zu konzentrieren
beizubehalten
bzw.
Nach Angaben von Gartner wird der weltweite Markt im Bereich
Siliciumwafer für die Halbleiterindustrie, gemessen in Millionen
Quadratzoll, von 2013 bis 2018 voraussichtlich mit einer
kumulierten jährlichen Wachstumsrate von fünf Prozent wachsen.
Dieses Wachstum bei der Nachfrage nach Siliciumwafern für die
Halbleiterindustrie ist in erster Linie auf die zunehmende
Verbreitung
von
mobilen
Geräten
wie
Smartphones
zurückzuführen.
Der Preis von Siliciumwafern für die Halbleiterindustrie wird in
der Regel in US-Dollar festgelegt. Der US-Dollar hat in den
vergangenen Monaten erheblich an Wert gewonnen. Diese
Entwicklung erhöht den Wert unserer auf US-Dollar lautenden
S-21
Umsätze im Vergleich
Aufwendungen.
B.5
Beschreibung der Gruppe
und Stellung des
Emittenten innerhalb der
Gruppe.
zu
unseren
auf
Euro
lautenden
Die Gesellschaft ist die Muttergesellschaft der Gruppe. Das
Geschäft der Gesellschaft wird von der Gesellschaft sowie von
ihren verschiedenen Tochtergesellschaften geführt.
Das folgende Diagramm gibt einen Überblick über die Gesellschaft
und die Tochtergesellschaften der Gesellschaft zum Datum dieses
Prospekts:
Wacker Chemie AG,
Deutschland
10%
100%
Venture GmbH,
Deutschland
Siltronic AG,
Deutschland
90%
100%
Siltronic Holding
International B.V.,
Krommenie, Niederlande
100%
100%
Siltronic Asia
Pte. Ltd.,
Singapur
B.6
100%
Siltronic Japan
Corporation,
Tokio, Japan
Personen, die eine direkte
oder indirekte
(anzeigepflichtige)
Beteiligung am
Eigenkapital des
Emittenten oder einen Teil
der Stimmrechte halten.
Stimmrechte.
Siltronic
Corporation,
Portland, USA
Siltronic
Singapore Pte.
Ltd., Singapur
Direkte Aktionäre
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78%
Siltronic Silicon
Wafer Pte. Ltd.,
Singapur (SSW)
27MAY201503543606
Zum Datum dieses Prospekts halten die folgenden Personen
unmittelbar oder mittelbar eine anzeigepflichtige Beteiligung am
Kapital und an den Stimmrechten der Gesellschaft:
Letztlicher Aktionär
Wacker-Familie . . . . .
Wacker Chemie AG(2)
Streubesitz(3) . . . . . . .
Summe . . . . . . . . . . .
100%
Wacker Chemie AG(2)
Wacker-Chemie Dritte Venture GmbH(2)
Wirtschaftliches (indirektes)
Eigentum an der
Gesellschaft in %(1)
Beteiligung (unmittelbar
vor dem Angebot)
100%
90%
0%
100%
(1)
Bezieht sich auf die indirekte wirtschaftliche Beteiligung an der Gesellschaft;
die Prozentangabe ist nicht als Hinweis zu verstehen, dass die Stimmrechte
aus diesen Aktien von der betreffenden Gesellschaft/Person kontrolliert
werden können.
(2)
Die Wacker-Chemie Dritte Venture GmbH hält einen Anteil von 90 Prozent
an der Gesellschaft im direkten Eigentum und ist eine 100%ige
Tochtergesellschaft der Wacker Chemie AG, die einen Anteil von zehn
Prozent an der Gesellschaft im direkten Eigentum hält.
(3)
Sonstige Aktionäre/Streubesitz bezieht sich auf Beteiligungen von weniger als
drei Prozent an der Gesellschaft vor und nach dem Beginn des Handels mit
den Aktien der Gesellschaft.
Jeder Aktie der Gesellschaft berechtigt zu einer Stimme auf der
Hauptversammlung der Gesellschaft. Es bestehen keine
Stimmrechtsbeschränkungen. Alle Aktien haben identische
Stimmrechte.
S-22
Unmittelbare oder
mittelbare Beherrschung
des Emittenten und Art
der Beherrschung.
Die Wacker Chemie AG hält über ihre unmittelbare Beteiligung
(zehn Prozent) und die Beteiligung ihrer 100%igen
Tochtergesellschaft, der Wacker-Chemie Dritte Venture GmbH
(90 Prozent), über 30 Prozent der Stimmrechte an der Gesellschaft
und hat damit einen beherrschenden Einfluss auf die Gesellschaft
nach Maßgabe des Wertpapiererwerbs- und Übernahmegesetzes
(WpÜG).
Die Wacker Chemie AG wird nach Abschluss des Angebots und
unter der Annahme (i) der Platzierung von 4.411.765 Neuen
Aktien (unter Erzielung von auf die Gesellschaft entfallenden
Bruttoerlösen in Höhe von ca. 150 Mio. Euro bei einem
Platzierungspreis zum Mittelwert der Preisspanne (gemäß
Definition in E.3)), in Verbindung mit dem Angebot und (ii) der
Ausübung der Mehrzuteilungsoption (gemäß Definition in E.3)
weiterhin etwa 8,5 Prozent unmittelbar und weiterhin etwa 50,8
Prozent mittelbar am Grundkapital der Gesellschaft halten. Bei
gleichbleibenden Annahmen und basierend auf einer Platzierung
von 5.000.000 Neuen Aktien bzw. 3.947.368 Neuen Aktien (unter
Erzielung von auf die Gesellschaft entfallenden Bruttoerlösen von
ca 150 Mio. Euro am unteren Ende bzw. am oberen Ende der
Preisspanne, wird die Wacker Chemie AG weiterhin unmittelbar
und mittelbar etwa 57,8 Prozent bzw. 60,5 Prozent am
Grundkapital der Gesellschaft halten. Somit wird die Wacker
Chemie AG weiterhin einen beherrschenden Einfluss auf die
Gesellschaft
gemäß
dem
Wertpapiererwerbsund
Übernahmegesetz (WpÜG) haben, und zwar unabhängig davon, ob
der Platzierungspreis am unteren oder oberen Ende oder zum
Mittelwert der Preisspanne festgesetzt wird.
B.7
Ausgewählte wesentliche
historische
Finanzinformationen.
Die in den nachstehenden Tabellen enthaltenen Finanzinformationen
sind den geprüften Konzernabschlüssen der Gesellschaft für die zum
31. Dezember 2014, 31. Dezember 2013 und 31. Dezember 2012
endenden Geschäftsjahre und dem ungeprüften verkürzten
Konzernzwischenabschluss der Gesellschaft für den zum 31. März
2015 endenden Dreimonatszeitraum sowie dem internen
Berichtssystem der Gesellschaft entnommen oder daraus abgeleitet.
Die geprüften Konzernabschlüsse wurden in Übereinstimmung mit den
Internationalen Rechnungslegungsvorschriften („IFRS‘‘), wie sie in der
Europäischen Union anzuwenden sind, erstellt, während der
ungeprüfte verkürzte Konzernzwischenabschluss gemäß den IFRS für
Zwischenberichterstattung erstellt wurde.
Der Konzernabschluss für die zum 31. Dezember 2014, 31. Dezember
2013 und 31. Dezember 2012 endenden Geschäftsjahre wurden durch
die KPMG Wirtschaftsprüfungsgesellschaft („KPMG‘‘) geprüft und
mit einem uneingeschränkten Bestätigungsvermerk versehen. Die
vorgenannten geprüften Konzernabschlüsse der Gesellschaft und der
Bestätigungsvermerk
sowie
der
ungeprüfte
verkürzte
Konzernzwischenabschluss für den zum 31. März 2015 endenden
Dreimonatszeitraum sind in diesem Prospekt aufgeführt.
Sofern Finanzdaten in den nachstehenden Tabellen als „geprüft‘‘
gekennzeichnet sind, bedeutet dies, dass sie den oben genannten
geprüften Abschlüssen entnommen wurden. Die Kennzeichnung
„ungeprüft‘‘ wird in den nachstehenden Tabellen zur
Kenntlichmachung von Finanzdaten verwendet, die nicht den oben
genannten Abschlüssen entnommen wurden, sondern entweder dem
ungeprüften verkürzten Konzernzwischenabschluss der Gesellschaft
oder ihrem internen Berichtssystem entnommen oder auf Basis dieser
Informationen berechnet wurden. Sämtliche Finanzdaten, die im
S-23
nachfolgenden Text und den Tabellen dargestellt sind, sind in
Millionen Euro dargestellt (Mio. B), sofern nicht anders angegeben.
Bestimmte Finanzdaten (einschließlich Prozentzahlen) in den
folgenden Tabellen sind in Übereinstimmung mit anerkannten
kaufmännischen Grundsätzen gerundet worden. Dementsprechend
könnten die Gesamtbeträge (Gesamtsummen, Zwischensummen,
Differenzbeträge oder Zahlen, die in Relation zueinander gesetzt
werden) in den nachfolgenden Tabellen in einigen Fällen nicht den
zugrundeliegenden (nicht gerundeten) Angaben an anderen Stellen in
den nachfolgenden Tabellen entsprechen. Darüber hinaus könnten
sich diese gerundeten Zahlen in den nachfolgenden Tabellen nicht
immer auf exakt die Summen aufaddieren lassen, die in diesen
Tabellen
enthalten
sind.
In
Klammern
dargestellte
Finanzinformationen kennzeichnen negative Werte. In Bezug auf
Finanzinformationen in diesem Prospekt bedeutet ein Strich („–‘‘),
dass die betreffende Finanzinformation nicht verfügbar ist, während
eine Null („0‘‘) bedeutet, dass die betreffende Finanzinformation
verfügbar ist, aber auf null gerundet wurde oder null entspricht. Die
bisherigen Ergebnisse der Gesellschaft lassen nicht notwendigerweise
auf die künftig zu erwartenden Ergebnisse schließen, und die
Zwischenergebnisse der Gesellschaft lassen nicht notwendigerweise auf
die im Gesamtjahr oder in einem anderen Zeitraum zu erwartenden
Ergebnisse schließen.
Ausgewählte Finanzdaten
Die folgende Tabelle weist ausgewählte Finanzinformationen aus
der Konzern-Gewinn- und Verlustrechnung der Gesellschaft für
die zum 31. März 2015 und 31. März 2014 endenden
Dreimonatszeiträume und die zum 31. Dezember 2014,
31. Dezember 2013 und 31. Dezember 2012 endenden
Geschäftsjahre aus:
S-24
Konzern-Gewinn- und Verlustrechnung
Dreimonatszeitraum
zum 31. März
2015
2014
(ungeprüft)
Geschäftsjahr zum
31. Dezember
2014
2013
2012
(in Mio. E)
(geprüft)
Umsatzerlöse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Herstellungskosten . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238,7
(199,1)
Bruttoergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39,6
9,1
76,6
84,2
81,1
(8,5)
(16,2)
(4,2)
(2,4)
(7,5)
(15,9)
(4,2)
21,1
(30,5)
(64,3)
(16,0)
20,6
(28,7)
(58,8)
(13,9)
(36,0)
(34,5)
(66,8)
(18,9)
(18,3)
Betriebsergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,3
2,6
(13,6)
(53,2)
(57,4)
Beteiligungsergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(3,5)
(3,5)
(42,5)
(26,6)
Betriebsergebnis abzüglich Beteiligungsergebnis . . . . . . .
8,3
(0,9)
(17,1)
(95,7)
(84,0)
Zinserträge und Zinsaufwendungen, netto . . . . . . . . . . .
Übriges Finanzergebnis . . . . . . . . . . . . . . . . . . . . . . . . .
(0,6)
(1,5)
(0,2)
(0,7)
(1,4)
(6,3)
6,1
(9,5)
5,3
(5,7)
Finanzergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,1)
(0,9)
(7,7)
(3,4)
(0,4)
Gewinn/ (Verlust) vor Ertragsteuern . . . . . . . . . . . . . . .
6,2
(1,8)
(24,8)
(99,1)
(84,4)
Ertragsteuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,3)
(1,2)
(2,2)
(10,2)
(6,2)
Gesamtergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
davon entfällt auf Aktionäre der Siltronic AG . . . . . . . . . .
1,9
3,2
(3,0)
(0,7)
(27,0) (109,3)
(16,0) (109,3)
(90,6)
(90,6)
davon entfällt auf nicht beherrschende Beteiligung . . . . . . .
(1,3)
(2,3)
(11,0)
Ergebnis pro Stammaktie in Euro (unverwässert /
verwässert) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0,06
(0,01)
(0,32)
Vertriebskosten . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forschungs- und Entwicklungskosten . . . . . . . . . . . . .
Allgemeine Verwaltungskosten . . . . . . . . . . . . . . . . . .
Sonstige betriebliche Erträge und Aufwendungen netto
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.
196,4
846,0
743,0
868,0
(187,3) (769,4) (658,8) (786,9)
—
(2,19)
—
(1,81)
der Konzernbilanz der Gesellschaft zum 31. März 2015 sowie zum
31. Dezember 2014, 31. Dezember 2013 und 31. Dezember 2012
aus:
Konzernbilanz
Zum 31. März
2015
(ungeprüft)
Zum 31. Dezember
2014
2013
2012
(in Mio. E)
(geprüft)
Langfristige Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . .
Kurzfristige Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . .
Summe Aktiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611,6
491,9
1.103,5
609,0
461,5
1.070,5
490,7
602,3
1.093,0
634,4
499,5
1.133,9
Eigenkapital . . . . . . .
Langfristige Schulden .
Kurzfristige Schulden .
Schulden . . . . . . . . . .
Summe Passiva . . . . .
197,5
548,3
357,7
906,0
1.103,5
311,8
441,2
317,5
758,7
1.070,5
790,2
212,8
90,0
302,8
1.093,0
748,3
271,4
114,2
385,6
1.133,9
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der Konzern-Kapitalflussrechnung der Gesellschaft für die zum
31. März 2015 und 31. März 2014 endenden Dreimonatszeiträume
S-25
und die zum 31. Dezember 2014, 31. Dezember 2013 und
31. Dezember 2012 endenden Geschäftsjahre aus:
Konzern-Kapitalflussrechnung
Dreimonatszeitraum
Geschäftsjahr zum
zum 31. März
31. Dezember
2015
2014
2014
2013
2012
(in Mio. E)
(ungeprüft)
(geprüft)
Cashflow aus betrieblicher Tätigkeit . . . .
Cashflow aus Investitionstätigkeit . . . . . .
Cashflow aus Finanzierungstätigkeit . . . .
Veränderung aus Wechselkursänderungen
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Veränderung der Zahlungsmittel und
Zahlungsmitteläquivalente . . . . . . . . . . . . . . . . . . . . . . .
47,7
(8,1)
(33,5)
4,1
10,2
87,2 124,7
47,7
(46,2)
18,1 (11,2) (31,3) (105,4)
(78,0) 58,6 (13,8) 158,3
0,1
2,8
(1,6)
(0,4)
27,4
174,9
1,0
6,3
Weitere Finanzinformationen und wesentliche Kennzahlen
Dreimonatszeitraum
zum 31. März
2015
2014
Geschäftsjahr zum
31. Dezember
2014
2013
2012
(in Mio. E)
(ungeprüft)
Angepasste Umsatzerlöse . .
Angepasstes EBITDA . . . . .
Angepasster Netto-Cashflow
Angepasste Investitionen . . .
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Wesentliche Änderungen
der Finanzlage und des
Betriebsergebnisses des
Emittenten in oder nach
dem von den wesentlichen
historischen
Finanzinformationen
abgedeckten Zeitraum.
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238,7
40,1
41,9
4,3
203,8
17,1
18,8
6,9
853,4
117,7
30,0
40,6
875,5
112,6
72,0
39,7
1.030,0
122,5
(134,6)
144,3
Im zum 31. März 2015 endenden Dreimonatszeitraum und in den
Geschäftsjahren 2014, 2013 und 2012 sind die folgenden
wesentlichen Änderungen beim Betriebsergebnis der Gesellschaft
eingetreten:
Im Januar 2014 hat die Gesellschaft durch eine Kapitalerhöhung
die Beherrschung über ihre Tochtergesellschaft SSW erlangt,
wodurch sich ihre Beteiligung an der Tochtergesellschaft auf
insgesamt 78 Prozent erhöht hat; zudem wird die
Tochtergesellschaft nunmehr im Ergebnis des Konzerns
konsolidiert. Dadurch ändert sich die Verbuchung der
Umsatzerlöse und der Herstellungskosten für die SSW. Zudem
verbucht die Gesellschaft keinen Wert mehr für das
Beteiligungsergebnis in ihrem Betriebsergebnis.
Dreimonatszeitraum zum 31. März 2015 und 2014.
Das Volumen der verkauften Wafer-Fläche hat sich erhöht,
während die Abwertung des Euro zu höheren Verkaufserlösen
(zum
Großteil
in
US-Dollar)
verglichen
mit
den
Herstellungskosten (in verschiedenen Währungen einschließlich
Euro und Singapur Dollar) führte. Diese Effekte führten zu einem
positiven Betriebsergebnis von 8,3 Mio. Euro und einem
Gesamtergebnis von 1,9 Mio. Euro in den ersten drei Monaten
2015 im Vergleich zu einem positiven Betriebsergebnis von 2,6
Mio. Euro und einem negativen Gesamtergebnis von 3,0 Mio.
Euro in den ersten drei Monaten 2014.
Geschäftsjahre 2014 und 2013
Die Umsatzerlöse stiegen mit der weiter zunehmenden Nachfrage
nach Wafer-Fläche. Ohne die SSW, die 2014 erstmals konsolidiert
wurde, nahmen die Herstellungskosten in Prozent der
Verkaufserlöse gegenüber dem Vorjahr weiter ab. Die
S-26
Währungsbewegungen
Betriebsverlustes bei.
trugen
zu
einer
Verringerung
des
Geschäftsjahre 2013 und 2012
Während
die
Umsatzerlöse
wegen
des
geringeren
durchschnittlichen
Verkaufspreises
sanken,
trugen
Kostensenkungen und die Schließung unserer Produktionsanlage
in Japan sowie die Zusammenlegung der Produktion von Wafern
mit weniger als 300 mm im Jahr 2013 zu höheren Gewinnmargen
bei. Auch dadurch konnte der Betriebsverlust 2013 gesenkt werden.
Jüngste Entwicklungen
Der Euro/ U.S. Dollar Wechselkurs ist zwischen 1,06 U.S Dollar
und 1,14 U.S. Dollar per Euro seit Ende März 2015 geblieben.
B.8
Ausgewählte wesentliche
Pro-formaFinanzinformationen.
Entfällt.
Die
Gesellschaft
Finanzinformationen erstellt.
hat
keine
Pro-forma-
B.9
Gewinnprognosen oder
-schätzungen.
Entfällt. Die Gesellschaft gibt keine Gewinnprognose oder
-einschätzung ab.
B.10
Beschränkungen im
Bestätigungsvermerk zu
den historischen
Finanzinformationen.
Entfällt. Die in diesem Prospekt enthaltenen historischen
Finanzinformationen
wurden
mit
uneingeschränkten
Bestätigungsvermerken versehen.
B.11
Geschäftskapital des
Emittenten zur Erfüllung
bestehender
Anforderungen nicht
ausreichend.
Entfällt. Die Gesellschaft ist der Ansicht, dass die Gruppe in der
Lage ist, sämtliche Zahlungsverpflichtungen zu erfüllen, die in den
nächsten zwölf Monaten fällig werden.
ABSCHNITT C – WERTPAPIERE
C.1
Art und Gattung der
angebotenen und/oder zum
Handel zuzulassenden
Wertpapiere.
Auf den Namen lautende Stammaktien ohne Nennbetrag
(Stückaktien), jeweils mit einem nominellen Anteil am
Grundkapital der Gesellschaft von A 4,00 und mit voller
Dividendenberechtigung ab dem 1. Januar 2015.
Wertpapierkennung.
International
Securities
DE000WAF3001
Identification
Number
(ISIN):
Wertpapierkennnummer (WKN): WAF300
Common Code: 122354644
Börsenkürzel: WAF
C.2
Währung.
Euro.
C.3
Zahl der ausgegebenen
und voll eingezahlten
Aktien.
Zum Datum dieses Prospekts beträgt das Grundkapital der
Gesellschaft A 100.000.000 und ist eingeteilt in 25.000.000 auf den
Namen lautende Stückaktien. Die Umwandlung der vormaligen
Inhaberaktien in Namensaktien wurde mit Eintragung der
Satzungsänderung in das Handelsregister am 11. Mai 2015
wirksam. Das Grundkapital ist vollständig eingezahlt. Alle Aktien
der Gesellschaft werden vollständig eingezahlt sein.
Die Aktien der Gesellschaft werden durch eine (oder mehrere)
Globalurkunde(n) (die „Globalurkunde‘‘) verbrieft, die bei der
Clearstream Banking Aktiengesellschaft, Mergenthalerallee 61,
65760 Eschborn, Deutschland, hinterlegt werden wird.
S-27
Nennwert.
Jede Aktie der Gesellschaft repräsentiert einen anteiligen Betrag
des Grundkapitals der Gesellschaft von A 4,00.
C.4
Mit den Wertpapieren
verbundene Rechte.
Jede Aktie der Gesellschaft berechtigt zu einer Stimme in der
Hauptversammlung der Gesellschaft. Es bestehen keine
Stimmrechtsbeschränkungen. Die Aktien der Gesellschaft sind ab
dem 1. Januar 2015 vollständig dividendenberechtigt.
C.5
Beschreibung aller
etwaigen Beschränkungen
für die freie
Übertragbarkeit der
Wertpapiere.
Entfällt. Die angebotenen und auf die Anleger übertragenen
Aktien der Gesellschaft sind in Übereinstimmung mit den
gesetzlichen Bestimmungen für auf den Namen lautende
Stammaktien frei übertragbar.
C.6
Antrag auf Zulassung der
Wertpapiere zum Handel
an einem geregelten Markt
und Nennung aller
geregelten Märkte, an
denen die Wertpapiere
gehandelt werden sollen.
Die Gesellschaft wird die Zulassung der Aktien der Gesellschaft
(inklusive der Neuen Aktien) zum regulierten Markt mit
gleichzeitiger Zulassung zum Teilbereich des regulierten Marktes
mit weiteren Zulassungsfolgepflichten (Prime Standard) an der
Frankfurter Wertpapierbörse am oder um den 1. Juni 2015
beantragen. Der Zulassungsbeschluss für die Aktien der
Gesellschaft wird voraussichtlich am 10. Juni 2015 erteilt. Der
Handel mit den Aktien der Gesellschaft an der Frankfurter
Wertpapierbörse wird voraussichtlich am 11. Juni 2015 beginnen.
C.7
Dividendenpolitik.
Die Gesellschaft beabsichtigt derzeit, der Unterstützung ihres
operativen Geschäftsbetriebs und den geplanten Investitionen in
ihr Geschäft Vorrang einzuräumen. Die Gesellschaft kann eine
Dividende zahlen, um dadurch Überschüsse auszuschütten, die sie
nicht für Investitionen einzusetzen beabsichtigt und nicht als
Kapitalrücklage
zur
Finanzierung
ihrer
fortgesetzten
Geschäftstätigkeit benötigt. Jede künftige Ausschüttung von
Dividenden wird in Übereinstimmung mit geltendem Recht
erfolgen und unter anderem von dem Geschäftsergebnis, der
Finanzlage, vertraglichen Beschränkungen und dem Kapitalbedarf
der Gesellschaft abhängen.
ABSCHNITT D – RISIKEN
D.1
Zentrale Risiken, die dem
Emittenten und seiner
Branche eigen sind.
Der Erwerb von Aktien der Gesellschaft ist mit verschiedenen Risiken
verbunden. Es folgt eine Zusammenstellung von wesentlichen Risiken
die unser Geschäft sowie unsere Finanz- und Ertragslage erheblich
negativ beeinflussen können. Der Marktpreis der Aktien der
Gesellschaft könnte bei Eintritt dieser Risiken fallen; in diesem Fall
könnten die Anleger ihre Investition ganz oder teilweise verlieren.
Die Reihenfolge, in der die Risikofaktoren dargestellt sind, stellt weder
eine Aussage über die Eintrittswahrscheinlichkeit noch über die
Bedeutung und Höhe der Risiken oder das Ausmaß der sich daraus
möglicherweise ergebenden Beeinträchtigung unseres Geschäfts sowie
unserer Finanz- oder Ertragslage dar.
Risiken im Zusammenhang mit unserer Geschäftstätigkeit
•
Unser Geschäft ist von der Halbleiterindustrie abhängig,
aufgrund deren volatilen und zyklischen Charakters die
Auslastung der Produktionskapazitäten für Siliciumwafer für
die Halbleiterindustrie erheblich schwanken kann; wir
könnten deshalb gezwungen sein, unsere Preise zu senken,
ohne die Kosten einschließlich unserer Fixkosten senken zu
können. Dadurch könnte unser Geschäft sowie unsere
Vermögens-, Finanz- und Ertragslage erheblich beeinträchtigt
werden.
S-28
•
Ein fallender oder volatiler durchschnittlicher Verkaufspreis
und Preisdruck durch Überkapazitäten in der Branche für
Siliciumwafer für die Halbleiterindustrie könnte unser
Geschäft sowie unsere Vermögens-, Finanz- und Ertragslage
jeweils erheblich beeinträchtigen.
•
Die technologischen Prozesse in den Branchen für Halbleiter
und für Siliciumwafer für die Halbleiterindustrie ändern sich
schnell; wir sind möglicherweise nicht in der Lage,
angemessen und schnell genug darauf zu reagieren. Das
könnte unsere Marktstellung sowie unser Geschäft sowie
unsere Vermögens-, Finanz- und Ertragslage jeweils erheblich
beeinträchtigen.
•
Wir sind möglicherweise nicht in der Lage, in der Zukunft
ausreichende Barmittel zu generieren oder andere
Kapitalquellen zu nutzen, um unseren Tagesbetrieb oder
unsere Investitionen zu finanzieren und unsere Schulden zu
bedienen. Das könnte unser Geschäft sowie unsere
Vermögens-, Finanz- und Ertragslage jeweils erheblich
beeinträchtigen.
•
Wichtige Kunden könnten ihre Käufe erheblich verringern
oder einstellen oder Zahlungen nicht mehr leisten. Das könnte
unser Geschäft sowie unsere Vermögens-, Finanz- und
Ertragslage jeweils erheblich beeinträchtigen.
•
Polysilicium, andere Sekundärmaterialien, Maschinen und
Ersatzteile werden nur von einer begrenzten Anzahl an
Lieferanten angeboten, wodurch wir dem Risiko von
Lieferstörungen und Preiserhöhungen ausgesetzt sind. Das
könnte unser Geschäft sowie unsere Vermögens-, Finanz- und
•
Wir sind Risiken aus Wechselkursschwankungen ausgesetzt,
die unsere Umsätze und Gewinnmargen beeinflussen können.
Ferner können nachteilige Veränderungen des U.S. Dollar
oder des Japanischer Yen Wechselkurses unser Geschäft sowie
unsere Vermögens-, Finanz- und Ertragslage jeweils erheblich
beeinträchtigen.
•
Wir sind innerhalb unserer Branche hartem Wettbewerb
ausgesetzt. Unsere Konkurrenten könnten neue Generationen
und Spezifikationen von Wafern schneller als wir, zu
niedrigeren Preisen oder mit besserer Leistungscharakteristik
einführen oder ihre Kosten stärker als wir senken oder von
Hilfeleistungen von Mutterunternehmen profitieren. Das
•
Wir
unterliegen
umweltrechtlichen
Gesetzen
und
Vorschriften. Das könnte uns einer Haftung für
Umweltschäden aussetzen oder unsere Herstellungskosten
und damit verbunden unsere Kosten für die Einhaltung von
Rechtsvorschriften usw. erhöhen. Das könnte unser Geschäft
sowie unsere Vermögens-, Finanz- und Ertragslage jeweils
erheblich beeinträchtigen.
•
Wir sind gelegentlich Prozessrisiken ausgesetzt. Ein
nachteiliger Ausgang oder ein kostspieliger Rechtsstreit
S-29
D.3
Zentrale Risiken, die den
Wertpapieren eigen sind.
Risiken in Verbindung mit den Aktien der Gesellschaft und dem
Angebot
•
Nach dem Angebot werden unsere Altaktionäre weiterhin
eine wesentliche Beteiligung an der Gesellschaft halten. Ihre
Interessen könnten den Interessen unserer anderen Aktionäre
widersprechen.
•
Unsere Fähigkeit zur Zahlung von Dividenden hängt unter
anderem von unserer Finanz- und Ertragslage ab.
•
Unsere Aktien sind bisher nicht an der Börse gehandelt
worden, und es ist nicht gewährleistet, dass sich ein aktiver
und liquider Markt für unsere Aktien entwickeln wird.
•
Der Kurs unserer Aktien könnte erheblich schwanken, und
Investoren könnten ihre Anlage ganz oder teilweise verlieren.
•
Künftige Verkäufe durch unsere Altaktionäre könnten den
Kurs unserer Aktien drücken.
ABSCHNITT E – ANGEBOT
E.1
Gesamtnettoerlöse.
Die Gesellschaft erhält den Erlös aus dem Angebot (wie in E.3
definiert), der sich aus dem Verkauf der Neuen Aktien (wie in E.3
definiert) nach Abzug von Gebühren und Provisionen ergibt. Der
Abgebende Aktionär (wie in E.3 definiert) erhält den Erlös aus
dem Angebot, der sich aus dem Verkauf von Bestehenden Aktien
und Mehrzuteilungsaktien (wie in E.3 definiert), die im
Zusammenhang mit der Mehrzuteilungsoption (wie in E.3
definiert) verkauft werden, nach Abzug von Gebühren und
Provisionen, ergibt.
Die Gesellschaft beabsichtigt bis zu 5.000.000 Neue Aktien (wie in
E.3 definiert) auszugeben, um Bruttoerlöse von ca. A 150 Mio. zu
erzielen. Dies entspricht jeweils 5.000.000, 4.411.765 und 3.947.368
Neuer Aktien am unteren Ende, in der Mitte und am oberen Ende
der für das Angebot festgelegten Preisspanne der Neuen Aktien
(die ,,Preispanne‘‘). Ausgehend von Bruttoerlösen in Höhe von
A 150 Mio. erwartet die Gesellschaft Nettoerlöse aus dem Angebot
in Höhe von ungefähr A 143,2 Mio. Die außerordentliche
Hauptversammlung der Gesellschaft wird die Anzahl der Neuen
Aktien mit dem Ziel festlegen, Bruttoerlöse in Höhe von ca. A 150
Mio. zu erzielen. Da die IPO Kapitalerhöhung jedoch vor der
Festlegung des Angebotspreises (wie in E.3 definiert) beschlossen
wird, kann der genaue Betrag der Bruttoerlöse deutlich über oder
unter A 150 Millionen liegen. Unter der Annahme, dass die
Bestehenden Aktien (wie in E.3 definiert), einschließlich der im
Zusammenhang mit der Mehrzuteilungsoption (wie in E.3
definiert)
(die
Mehrzuteilungsoption
stellt
in
diesem
Zusammenhang 15 Prozent der platzierten Basisaktien oder
1.561.764 Aktien zum Mittelwert der Preisspanne dar) platzierten
Aktien, zu einem Platzierungspreis zum Mittelwert der Preisspanne
platziert werden, wird sich der auf den Abgebenden Aktionär (wie
in E.3 definiert) entfallende Gesamtnettoerlös aus dem Angebot
(wie in E.3 definiert) auf ungefähr A 245,4 Mio. belaufen.
Geschätzte Gesamtkosten
des Angebots und der
Börsennotierung,
einschließlich der
geschätzten Kosten, die
dem Anleger vom
Die durch das Angebot (wie in E.3 definiert) und die
Börsennotierung der Aktien der Gesellschaft entstehenden Kosten
werden von der Gesellschaft und dem Abgebenden Aktionär (wie
in E.3 definiert) anteilig im Verhältnis zur Gesamtanzahl der
veräußerten Angebotsaktien (wie in E.3 definiert) getragen und
sich voraussichtlich auf insgesamt ungefähr A 5,3 Mio.
S-30
Emittenten in Rechnung
gestellt werden.
(ausgenommen Konsortial- und Platzierungsprovisionen, die an die
Konsortialbanken gezahlt werden) belaufen.
Unter der Annahme, dass (i) alle 4.411.765 Neuen Aktien (unter
Erzielung von auf die Gesellschaft entfallenden Bruttoerlösen von
ca. A 150 Mio.) und die Bestehenden Aktien (wie in E.3 definiert)
zum Mittelwert der Preisspanne platziert werden, (ii) die
Mehrzuteilungsoption (wie in E.3 definiert) vollständig ausgeübt
wird und (iii) die im Ermessen stehende Gebühr von bis zu A 4,1
Mio. vollständig gezahlt wird, werden sich die an die
Konsortialbanken zu zahlenden Provisionen und Aufwendungen
auf A 13,2 Mio. belaufen.
Auf der Grundlage der im vorstehenden Absatz dargelegten
Annahmen werden die von der Gesellschaft zu tragenden
Gesamtkosten des Angebots (wie unter E.3 definiert) und der
Börsennotierung der Aktien der Gesellschaft (einschließlich der an
die Konsortialbanken zu zahlenden Provisionen) voraussichtlich
A 6,8 Mio. betragen.
Anlegern werden von der Gesellschaft oder den Konsortialbanken
keine Kosten in Rechnung gestellt.
E.2a
Gründe für das Angebot.
Die Gesellschaft beabsichtigt, (i) mit dem Verkauf der Neuen
Aktien ihre Schulden (eine am 30. Juni 2015 auslaufende
Kreditfazilität in Höhe von A150 Mio. zur Finanzierung ihres
laufenden Betriebs und geplanter Kapitalanlagen) zu refinanzieren
und (ii) mit der Zulassung ihrer Aktien zum regulierten Markt der
Frankfurter Wertpapierbörse mit gleichzeitiger Zulassung zum
Teilbereich
des
regulierten
Marktes
mit
weiteren
Zulassungsfolgepflichten (Prime Standard) an der Frankfurter
Wertpapierbörse einen besseren Zugang zum Kapitalmarkt zu
erhalten.
Zweckbestimmung der
Erlöse, geschätzte
Nettoerlöse.
Die Gesellschaft beabsichtigt, die Nettoerlöse aus diesem Angebot
zur Rückzahlung der zur Finanzierung des Betriebs der
Gesellschaft verwendeten Kreditfazilität sowie für allgemeine
Unternehmenszwecke zu verwenden. Die Gesellschaft kann einen
Teil der Nettoerlöse auch zur Investition in die Verbesserung ihrer
technologischen Fähigkeiten, in Anlagen und Technologien
einschließlich
ihrer
Pläne
zur
Beseitigung
von
Produktionsengpässen (Debottlenecking) verwenden.
Die Gesellschaft erhält den Erlös aus dem Angebot (wie unter E.3
definiert), der sich aus dem Verkauf der Neuen Aktien nach Abzug
von Gebühren und Provisionen ergibt. Der Abgebende Aktionär
erhält den Erlös aus dem Angebot (wie in E.3 definiert), der sich
aus dem Verkauf von Bestehenden Aktien (wie in E.3 definiert)
einschließlich Mehrzuteilungsaktien (wie in E.3 definiert), die im
Zusammenhang mit der Ausübung der Mehrzuteilungsoption (wie
in E.3 definiert) verkauft werden, ergibt, jeweils nach Abzug von
Gebühren und Provisionen. Die Gesellschaft beabsichtigt eine
solche Anzahl von Neuen Aktien im Rahmen des Angebots
auszugeben und zu platzieren, die erforderlich ist, um Bruttoerlöse
für die Gesellschaft in Höhe von ca. A 150 Mio. und Nettoerlöse für
die Gesellschaft in Höhe von ca. A 143,2 Mio. zu erzielen. Die
Erzielung solcher Erlöse würde erreicht, wenn 4.411.765 Neue
Aktien zum Mittelwert der Preisspanne platziert werden. Unter der
Annahme, dass die Mehrzuteilungsoption (wie unter E.3 definiert)
vollständig ausgeübt wird und die Bestehenden Aktien zum
Mittelwert der Preisspanne platziert werden, erwartet der
Abgebende Aktionär, dass er aus dem Angebot (wie unter E.3
S-31
definiert) einen Bruttoerlös von ungefähr A 257,1 Mio. erzielt; die
dem Abgebenden Aktionär daraus zuzurechnenden Nettoerlöse
werden ungefähr A 245,4 Mio. betragen.2
E.3
Angebotskonditionen.
Dieses Angebot bezieht sich auf den Verkauf von 12.650.000 auf
den Namen lautenden Stammaktien ohne Nennbetrag
(Stückaktien) der Gesellschaft mit einem anteiligen Betrag am
Grundkapital
von
jeweils
A
4,00
und
mit
voller
Dividendenberechtigung ab dem 1. Januar 2015 (das „Angebot‘‘)
und setzt sich zusammen aus:
•
5.000.000 neu ausgegebenen, auf den Namen lautenden
Stammaktien ohne Nennbetrag (Stückaktien) der Siltronic AG
(die „Neuen Aktien‘‘) aus einer Kapitalerhöhung gegen
Bareinlagen,
die
von
einer
außerordentlichen
Hauptversammlung der Gesellschaft voraussichtlich am 8. Juni
2015 beschlossen wird (die „IPO-Kapitalerhöhung‘‘);
•
6.000.000 bestehenden auf den Namen lautenden
aus dem Bestand der Wacker-Chemie Dritte Venture GmbH
(der „Abgebende Aktionär‘‘) (die „Bestehenden Aktien‘‘ und
zusammen mit den Neuen Aktien die „Basisaktien‘‘); und
•
1.650.000 bestehenden auf den Namen lautenden
aus dem Bestand des Abgebenden Aktionärs in
Zusammenhang mit einer möglichen Mehrzuteilung (die
„Mehrzuteilungsaktien‘‘ und zusammen mit den Basisaktien
die „Angebotsaktien‘‘).
Das Angebot besteht aus öffentlichen Angeboten in der
Bundesrepublik
Deutschland
(„Deutschland‘‘)
und
im
Großherzogtum Luxemburg sowie Privatplatzierungen in
bestimmten Rechtsordnungen außerhalb Deutschlands und des
Großherzogtums Luxemburg. In den Vereinigten Staaten von
Amerika (die „Vereinigten Staaten‘‘) werden die Aktien der
Gesellschaft nur qualifizierten institutionellen Anlegern gemäß
Rule 144A nach dem U.S. Securities Act von 1933 in der derzeit
gültigen Fassung angeboten und verkauft. Außerhalb der
Vereinigten Staaten werden die Aktien der Gesellschaft nur im
Rahmen von Offshore-Geschäften gemäß der Regulation S nach
dem U.S. Securities Act von 1933 in der derzeit gültigen Fassung
angeboten und verkauft.
2
Angebotszeitraum.
Der Zeitraum, in dem Anleger ihre Kaufangebote für die
Angebotsaktien abgeben können, beginnt voraussichtlich am
1. Juni 2015 und endet voraussichtlich am 10. Juni 2015 (der
„Angebotszeitraum‘‘). Am letzten Tag des Angebotszeitraums
können Kaufangebote (i) von Privatanlegern bis 12:00 Uhr
(Mitteleuropäische Sommerzeit) („MESZ‘‘) und (ii) von
institutionellen Anlegern bis 14:00 Uhr MESZ abgegeben werden.
Preisspanne.
Die Preisspanne, innerhalb derer Kaufangebote abgegeben werden
dürfen, liegt bei A 30,00 bis A 38,00 je Angebotsaktie.
Angebotspreis.
Der Platzierungspreis (der „Angebotspreis‘‘) und die endgültige
Anzahl an Angebotsaktien, die im Rahmen des Angebots platziert
werden sollen, stehen zum Datum dieses Prospekts noch nicht fest;
sie werden gemeinsam von der Gesellschaft und den Joint
Je nach Aktienpreis und Anzahl der im Rahmen des Angebots platzierten Aktien können sowohl die absoluten Beträge als
auch die relativen Umfänge der an die Gesellschaft und den Abgebenden Aktionär gehenden Erlöse variieren.
S-32
Bookrunners am 10. Juni 2015 auf der Grundlage der von
Investoren abgegebenen Angebote, die im während eines
Bookbuilding-Prozesses erstellten Orderbuch zusammengetragen
wurden, festgelegt. Der Angebotspreis und die endgültige Anzahl
der im Rahmen des Angebots platzierten Angebotsaktien (d.h. die
Ergebnisse des Angebots) werden voraussichtlich am selben Tag
mittels einer Ad-hoc-Mitteilung durch ein elektronisches
Informationsverbreitungssystem und auf der Website der
Gesellschaft veröffentlicht.
Sollte sich das Platzierungsvolumen als unzureichend erweisen, um
alle zum Angebotspreis platzierten Angebote zu bedienen,
behalten sich die Konsortialbanken das Recht vor, Angebote
zurückzuweisen oder nur teilweise anzunehmen.
Lieferung und
Abrechnung.
Die Angebotsaktien werden voraussichtlich am 15. Juni 2015 gegen
Zahlung des Angebotspreises geliefert. Die Angebotsaktien
werden den Aktionären als Miteigentumsanteile an der
Globalurkunde zur Verfügung gestellt.
Bevorrechtigte Zuteilung.
Den beiden Vorstandsmitgliedern werden im Rahmen des
Angebots Aktien bevorrechtigt zugeteilt. Die Vorstandsmitglieder
werden insgesamt Angebotsaktien im Gegenwert von insgesamt
A 102.000
erhalten
(3.000
Angebotsaktien
zu
einem
Platzierungspreis zum Mittelwert der Preisspanne).
Stabilisierungsmaßnahmen,
Mehrzuteilung und
Mehrzuteilungsoption.
Im Zusammenhang mit der Platzierung der Angebotsaktien
handelt die Citigroup, Global Markets Limited, London, United
Kingdom,
für
Rechnung
der
Konsortialbanken,
als
Stabilisierungsmanager (der „Stabilisierungsmanager‘‘) und kann
als solcher in Übereinstimmung mit den rechtlichen Bestimmungen
(§ 20a Abs. 3 Wertpapierhandelsgesetz in Verbindung mit
Verordnung (EG) Nr. 2273/2003 vom 22. Dezember 2003)
Mehrzuteilungen vornehmen und Stabilisierungsmaßnahmen
ergreifen, um den Marktpreis der Aktien der Gesellschaft zu
stützen
und
dadurch
einem
etwaigen
Verkaufsdruck
entgegenzuwirken.
Bei möglichen Stabilisierungsmaßnahmen können Anlegern
zusätzlich zu den Neuen Aktien und den Bestehenden Aktien bis
zu 1.650.000 Mehrzuteilungsaktien als Teil der Zuteilung der
Angebotsaktien zugeteilt werden („Mehrzuteilung‘‘). Für eine
mögliche Mehrzuteilung stellt der Abgebende Aktionär der Citi bis
zu 1.650.000 Aktien (maximal 15 Prozent der Basisaktien) in Form
eines Wertpapierdarlehens zur Verfügung. Der Abgebende
Aktionär räumt den Konsortialbanken eine Option zum Erwerb
einer der Anzahl der Mehrzuteilungsaktien entsprechenden
Anzahl von Aktien der Gesellschaft zum Angebotspreis abzüglich
der vereinbarten Provisionen ein (die „Mehrzuteilungsoption‘‘).
Die Mehrzuteilungsoption endet 30 Kalendertage nach dem ersten
Handelstag.
Die
Konsortialbanken
können
die
Mehrzuteilungsoption ausüben, soweit anfänglich Mehrzuteilungen
vorgenommen wurden. Die Anzahl der Aktien, auf die sich die
Mehrzuteilungsoption bezieht, ist um die Anzahl der Aktien zu
reduzieren, die von dem Stabilisierungsmanager am Tag der
Ausübung der Mehrzuteilungsoption gehalten werden und von
diesem im Zusammenhang mit Stabilisierungsmaßnahmen
erworben wurden.
Am Ende des Stabilisierungszeitraums werden die näheren
Bestimmungen zu den ergriffenen Stabilisierungsmaßnahmen
bekanntgegeben. Die Ausübung der Mehrzuteilungsoption, der
S-33
Zeitpunkt der Ausübung sowie die Anzahl und Gattung der
betreffenden Aktien wird ebenfalls unverzüglich bekanntgegeben.
E.4
Wesentliche Interessen an
der Notierung,
einschließlich
Interessenkonflikten.
Uns sind keine Interessenkonflikte bekannt.
Im Zusammenhang mit dem Angebot und der Zulassung der
Aktien der Gesellschaft zum Handel befinden sich die
Konsortialbanken in einer vertraglichen Beziehung mit der
Gesellschaft.
Die Konsortialbanken handeln bei dem Angebot im Auftrag der
Gesellschaft und koordinieren dessen Strukturierung und
Durchführung. Nach erfolgreichem Abschluss des Angebots
erhalten die Konsortialbanken eine Provision. Aufgrund dieser
vertraglichen Beziehungen haben die Konsortialbanken ein
persönliches finanzielles Interesse am Erfolg des Angebots.
Der Abgebende Aktionär beabsichtigt einen Teil seiner Aktien zu
veräußern. Der Abgebende Aktionär und seine Muttergesellschaft,
die Wacker Chemie AG, erhalten Erlöse aus dem Angebot. Der
Anteil des Abgebenden Aktionärs beläuft sich dabei auf 63,2
Prozent des Bruttoerlöses aus dem Angebot (auf Basis der
Platzierung von 4.411.765 Neuen Aktien und den Bestehenden
Aktien
sowie
der
vollständigen
Ausübung
der
Mehrzuteilungsoption). Ferner beabsichtigen wir eine durch
Wacker Chemie AG gewährte Kreditfazilität in Höhe von A 150
Mio, mit unseren Nettoerlösen aus dem Angebot zu refinanzieren.
Daher haben der Abgebende Aktionär sowie Wacker Chemie AG
ein finanzielles Interesse an dem Angebot.
Unmittelbar vor dem Angebot hielten die Mitglieder des Vorstands
keine Aktien der Gesellschaft. Die Vorstandsmitglieder werden
insgesamt Angebotsaktien im Gegenwert von insgesamt A 102.000
erhalten (3.000 Angebotsaktien zu einem Platzierungspreis zum
Mittelwert der Preisspanne).
E.5
Name der Person/des
Unternehmens, die/das das
Wertpapier zum Verkauf
anbietet.
Die Aktien der Gesellschaft werden von den Konsortialbanken
zum Verkauf angeboten.
Lock-up-Vereinbarung: Die
beteiligten Parteien und
die Lock-up-Frist.
Wir, die Wacker Chemie AG, die Wacker-Chemie Dritte
Venture GmbH und der Vorstand, haben uns verpflichtet, dass
weder wir noch sie ohne die vorherige schriftliche Zustimmung von
Citi und Credit Suisse im Namen der Konsortialbanken
(vorbehaltlich bestimmter Ausnahmen) während eines Zeitraums
von 180 Tagen nach dem Datum dieses Prospekts
•
Aktien oder andere Wertpapiere, die in Aktien wandelbar
oder für Aktien ausübbar oder umtauschbar sind, anbieten,
verpfänden, verkaufen, eine vertragliche Verpflichtung zu
deren Verkauf eingehen, eine Kaufoption oder einen
Kaufvertrag in Bezug auf diese verkaufen, eine
Verkaufsoption oder einen Verkaufsvertrag in Bezug auf diese
kaufen, eine Option, ein Recht oder einen Optionsschein zu
deren Kauf einräumen, diese verleihen oder anderweitig
übertragen oder direkt oder indirekt veräußern oder
•
einen Swap oder eine andere Vereinbarung abschließen,
wodurch die sich aus dem Eigentum an den Aktien
ergebenden wirtschaftlichen Folgen ganz oder teilweise auf
Dritte übertragen werden,
S-34
unabhängig davon, ob die vorstehend genannten Geschäfte durch
die Lieferung unserer Aktien oder dieser anderen Wertpapiere, in
bar oder anderweitig zu erfüllen sind.
E.6
Betrag und Prozentsatz
der aus dem Angebot
resultierenden
unmittelbaren
Verwässerung.
Der Nettobuchwert der Gesellschaft belief sich zum 31. März 2015
auf A 167,5 Mio. und würde bei 25.000.000 ausstehenden Aktien
der Gesellschaft unmittelbar vor der Ausgabe der Neuen Aktien
A 6,70 pro Aktie betragen.
Der Verwässerungseffekt des Angebots ist in der nachfolgenden
Tabelle dargestellt, die den Betrag angibt, um den der Mittelwert
der Preisspanne den Nettobuchwert der Gesellschaft pro Aktie
nach Abschluss des Angebots übersteigt. Hierbei wird als
Annahme zugrunde gelegt, dass 4.411.765 Neue Aktien zum
Mittelwert der Preisspanne platziert werden und die Bruttoerlöse
A 150 Mio. bzw. die Nettoerlöse A 143,2 Mio. betragen. Im Hinblick
darauf wird das auf die Aktionäre entfallende Eigenkapital um die
Effekte der Ausgabe der Neuen Aktien und deren Platzierung, die
zu einer erwarteten Erhöhung des Nettobuchwerts auf A 143,2 Mio.
führen, angepasst. Die voraussichtliche Erhöhung basiert auf dem
erwarteten Nettoerlös. Der angepasste Nettobuchwert ist als Wert
pro Aktie angegeben, wobei von 29.411.765 umlaufenden Aktien
der Gesellschaft nach Abschluss des Angebots ausgegangen wird
(dieser Wert pro Aktie im Folgenden „Post-IPO-Nettobuchwert
pro Aktie‘‘).
Preis pro Aktie der Gesellschaft (in A; auf Grundlage des
Mittelwerts der Preisspanne) . . . . . . . . . . . . . . . . . . .
Nettobuchwert pro Aktie der Gesellschaft zum 31. März
2015 (unter der Annahme von 25.000.000 umlaufenden
Aktien der Gesellschaft unmittelbar vor der Ausgabe
der Neuen Aktien) (in A) . . . . . . . . . . . . . . . . . . . . . .
Post-IPO-Nettobuchwert pro Aktie der Gesellschaft (in
A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Betrag, um den der Angebotspreis pro Aktie der
Gesellschaft den Post-IPO-Nettobuchwert pro Aktie
der Gesellschaft übersteigt (unmittelbare Verwässerung
pro Aktie) (in A) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unmittelbare Verwässerung (pro Aktie) (in %) . . . . . . . .
E.7
Schätzung der Ausgaben,
die dem Anleger vom
Emittenten in Rechnung
gestellt werden.
34,00
6,70
10,56
23,44
68,9
Entfällt. Anlegern werden von der Gesellschaft oder den
Konsortialbanken keine Kosten in Rechnung gestellt.
S-35
PART 1: RISK FACTORS
This offering (the ‘‘Offering’’) and an investment in our ordinary shares involve a high degree of risk. You should
carefully consider the risks described below, together with the financial and other information contained in this
prospectus, before you decide to purchase our ordinary shares. If any of the following risks actually occurs, our
business, financial condition, results of operations and prospects could be materially adversely affected. As a
result, the trading price of our ordinary shares could decline and you could lose all or part of your investment in
our ordinary shares.
References to the ‘‘Company’’ refer to Siltronic AG and, the Company together with its consolidated
subsidiaries, are referred to as ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ the ‘‘Group,’’ the ‘‘Siltronic Group,’’ or ‘‘Siltronic.’’ Our
ultimate parent company is Wacker Chemie AG and it and its subsidiaries, including Wacker-Chemie Dritte
Venture GmbH (the ‘‘Selling Shareholder’’) are referred to throughout this prospectus as the ‘‘Wacker group’’ or
simply ‘‘Wacker.’’
A.
RISKS RELATING
TO
OUR BUSINESS
Our business depends on the semiconductor device industry, the volatile and cyclical nature of which can
significantly change the utilization of production capacities for semiconductor silicon wafers. These changes could
materially adversely affect our business, net assets, financial condition and results of operations.
The semiconductor industry is the primary customer for semiconductor silicon wafers, and the demand for
semiconductor silicon wafers closely correlates to production volumes in the semiconductor industry. The
semiconductor industry is highly volatile and cyclical by nature, having experienced significant periodic
downturns in recent years. Although closely linked to the cycles in the overall economy, the cycles in the
semiconductor industry are significantly more pronounced than in most other industries. Consequently, the
demand for semiconductor silicon wafers fluctuates according to the cycles of the semiconductor industry.
For example, in 2009, demand for wafers for semiconductor applications dropped by approximately
17 percent as compared to 2008, according to Gartner Inc. (‘‘Gartner’’). Although demand recovered
strongly during 2010, it declined again slightly in 2011 and 2012. As another example, in the second half of
2011, demand for wafers for semiconductor applications dropped by approximately 15 percent in the
fourth quarter of 2011 as compared to the third quarter of 2011, according to SEMI Silicon Manufacturers
Group (‘‘SEMI’’). Similarly, although demand stabilized during the first half of 2012, it dropped again
during the second half of 2012. In 2013, demand for semiconductor silicon wafers stabilized and
subsequently increased by 11 percent in 2014, according to Gartner. Due to the capital-intensive nature of
the semiconductor silicon wafer business, we and our competitors cannot quickly adjust the production
capacity of semiconductor silicon wafers to respond to significant swings in market demand, such as those
we have experienced in the past. As a result, historical cycles in the semiconductor industry have
significantly changed the utilization of production capacities for semiconductor silicon wafers. A weak
semiconductor industry typically triggers weaker sales and a decrease in prices in the semiconductor silicon
wafers market.
Future weakness or declining trends in the semiconductor industry could cause a decrease in prices of our
semiconductor silicon wafers and a decrease in the utilization of our production capacity. This may lead to
decreased or negative margins and impair our revenues. Any of these events could materially adversely
affect our business, net assets, financial condition and results of operations.
The average selling prices for each generation of semiconductor silicon wafers have declined over time, and, against
that longer-term trend, have also displayed significant short-term price volatility in recent years. In addition,
over-capacity in the semiconductor silicon wafer industry and the continued strength of device manufacturers’
bargaining power could force us to lower our prices. Any such price decline could materially adversely affect our
business, net assets, financial condition and results of operations.
Prices of semiconductor silicon wafers generally have declined over time, particularly in the period after
which a new wafer generation is introduced. For example, from 2008 to 2014, average selling prices of
semiconductor silicon wafers (in U.S. Dollars (‘‘$’’)) have declined by more than 40 percent, according to
Gartner. In addition to this downward trend of semiconductor silicon wafer average selling prices, which
may continue over the long-term, we have in recent years experienced and continue to experience
significant short-term price volatility. This may potentially expose us to the negative effects of price
declines. Over-capacity in the semiconductor silicon wafer industry has in particular been responsible for
exposing us to rapid price declines from time to time. For example, the continuous industry-wide
over-capacity, especially for 300 mm wafers between 2011 and 2013, led to a price decline of approximately
1
14 percent for semiconductor silicon wafers in 2013, according to data from Gartner. However, average
selling prices had increased by approximately five percent in 2011 as compared to those in 2010. The
negative effects of these trends have been exacerbated as prices of our customer’s semiconductor products
generally decline over time and in certain cases very rapidly, in the face of market conditions, causing them
to push semiconductor silicon wafer manufacturers to reduce their prices.
Moreover, consolidation within the semiconductor industry has increased the pricing power of our
customers over time. If this trend continues, we may be forced to accept price reductions in the future as
well. Fluctuations in the rate at which industry capacity grows relative to the growth rate in demand for
semiconductor silicon wafers may also put pressure on our average selling prices in the future. Our current
business arrangements with our customers are generally governed by purchase orders or, in certain cases,
short-term agreements and may not protect us from potential future price decreases or customers who fail
to pay us. Our sales and gross profit will decline as average selling prices decline unless we are able to
reduce the cost to manufacture our wafers at the same or a greater rate or sell more wafers. Any decline in
average selling prices would materially adversely affect our business, net assets, financial condition and
results of operations.
If we are not be able to react appropriately and quickly enough to the rapid technological changes in the
semiconductor and semiconductor silicon wafer industries, our business, net assets, financial condition and results
of operations could be materially adversely affected.
Technological changes can rapidly change the semiconductor silicon wafer industry. To remain competitive,
we must adapt to changes in our customers’ requirements by developing new and more demanding
technologies, wafer specifications and diameters, as well as manufacturing processes. Semiconductor
manufacturers regularly launch new design rules for semiconductor manufacturing. Design rules are
provided by semiconductor manufacturers and specify wafer parameters, such as geometry, purity and
surface properties. They are commonly referred to in accordance with their feature size as expressed in
nanometers (e.g. ‘‘11nm’’). New design rules intensify the demand for geometry, purity, surface
composition and homogeneity in semiconductor silicon wafers. As a result, we must continue to develop
and launch wafer generations and technologies that comply with new design rules to maintain our
competitiveness.
One example of technological advancement is that diameters of semiconductor silicon wafers have
increased incrementally over time, resulting generally in improved production yields. Until several years
ago, it appeared that the semiconductor silicon wafer industry was trending towards implementing largescale production of 450 mm wafers. We were first able to produce 450 mm wafers in 2012; however, a
market for the wafers did not develop. Due to the high costs we believe are required to implement
manufacturing, we anticipate such wafers would offer limited prospects for our profitability. Therefore we
ceased producing 450 mm wafers. We do not intend to resume work on implementation of 450 mm wafer
manufacturing until we perceive that our customers or the market become receptive to them. Our
expectations, however, about the timing, profitability or the future implementation of wafers with
increased diameters may be incorrect. In case of an increased market demand for wafers with increased
diameters in the future, our competitors may focus more on 450 mm wafers, and in such an event, it may
take us longer to ramp up increased diameter wafer production compared to our competitors. If this were
to occur, we would incur significant expense to extend existing shells or to open new production facilities
for 450 mm wafer production. If we do start 450 mm wafer production, it would likely take us a significant
amount of time to recoup the costs of our investments, as our margins on these wafers would likely decline
over time.
Beyond the question of the production of semiconductor silicon wafers with increased diameters, our
commitment to the development of new manufacturing processes, technologies, wafer specifications and
types, must be made well in advance of the introduction of new wafer generations and technologies into
the market. New developments also require considerable research and development expenditure and
substantial investment. As part of this commitment, we must continually review our technologies and
processes to maintain the technological properties and robustness to permit volume manufacturing at
competitive costs. In addition, the demands of our customers may change during the development process,
rendering our products outdated or uncompetitive. Despite constant market monitoring and testing, we
might not successfully introduce, market and cost-effectively manufacture new wafer types. We may prove
unable to develop new or enhanced wafers and processes that satisfy our customers’ needs. Whenever we
implement a new wafer specification in our manufacturing processes, we expose ourselves to an increased
risk of product impurities, operational disruptions or other inefficiencies, especially since the
2
implementation of next generation wafer production methods is particularly complex. In addition, our
competitors may adapt to technological changes more quickly and might develop new wafer specifications
faster than we do at lower prices or with better performance characteristics. If we are unable to adapt to
changing customer demands, or if our new wafer types or generations do not achieve market acceptance,
our business, net assets, financial condition and results of operations could be materially adversely
affected.
Future alternative materials might replace silicon in the production of electronic circuits. In our opinion,
research in this area is still at an early stage. However, if any future semiconductor devices were
manufactured using alternative materials, the competition from such devices could represent a significant
risk to the foundation of our business and could result in a significant deterioration of our net assets,
In the future, we may not be able to generate sufficient cash or draw upon other sources of capital to fund our
day-to-day operations, finance our capital expenditures and service any future indebtedness, in which case our
business, net assets, financial condition and results of operations could be materially adversely affected.
We require significant amounts of capital to cover the high fixed costs associated with operating and
maintaining our manufacturing facilities and to fund our ongoing research and development efforts. We
also require working capital and liquidity to finance our operations across the manufacturing cycle and to
withstand downturns in our business. Furthermore, we may require capital in the future to expand existing
manufacturing capacities or build new facilities. Our ability to make scheduled payments on or to refinance
any current or future indebtedness depends on our financial condition and operating performance.
Leading up to the Offering, we participated in the Wacker group cash pooling system, and in this
connection were able to carry a negative balance under the cash pooling arrangement, which amounted to
A 26.0 million at the end of 2014. In addition, we will receive approximately A 150 million in gross proceeds
from the Offering (assuming the issuance of 4,411,765 New Shares placed at the mid-point of the Price
Range (defined below)) which we will use to repay amounts outstanding under our credit facility with
Wacker Chemie AG which we fully drew down at the end of 2014 and under which A 142.3 million was
outstanding as of March 31, 2015. Wacker Chemie AG, through its subsidiary Wacker-Chemie Dritte
Venture GmbH, also reimbursed us for losses incurred in Germany from 2009 through 2014 pursuant to a
profit and loss transfer agreement which we agreed to terminate with effect on December 31, 2014.
Following the Offering, Wacker Chemie AG may not provide us with such forms of financial support in the
future. In the past, we have also benefitted from being a consolidated segment of the Wacker group in
terms of access to capital, but now we may be unable to obtain debt financing or lines of liquidity on terms
as favorable as was previously the case because we lack an independent credit history of our own. We may
be unable to generate a sufficient level of cash flows from operating activities to fund our day-to-day
operations or to pay the principal, premium, if any, and interest on any indebtedness we may incur.
Because we already must expend significant resources to cover the high fixed costs associated with
operating and maintaining our manufacturing facilities and we can only rely on the revenue we receive
from selling semiconductor silicon wafers to generate future cash flows, we may experience liquidity
shortfalls. This may especially be the case if we are also subject to a cyclical or other downturn in the
semiconductor industry, poor general market and economic conditions or unfavorable exchange rates. We
might also generate less cash from our operations if we fail to foresee future technological changes in the
semiconductor silicon wafer or semiconductor industry such that our sales decline, or we fail to manage
our assets adequately. If our cash flows and capital resources are insufficient to fund our ongoing capital
expenditures (including debt service obligations), we could face substantial liquidity problems and could be
forced to (i) reduce or delay investments and capital expenditures, (ii) sell assets or operations, (iii) seek
additional capital or (iv) restructure or refinance our indebtedness. If we cannot make scheduled payments
on debt we may incur, we would be in default. In the event of a default, our lenders could terminate their
commitments to loan money or foreclose against the assets securing such borrowings. Insufficient liquidity
could force us into bankruptcy or liquidation. Any of these events could materially adversely affect our
Exchange rate fluctuations could significantly negatively affect our earnings and cash flow.
We are exposed to exchange rate fluctuations, most significantly those between the U.S. Dollar and the
Euro, as the prices of semiconductor silicon wafers are typically based on or pegged to the U.S. Dollar,
while a significant portion of our costs, such as those relating to personnel in Germany, raw materials and
power at our German production sites, is incurred in Euro. Other exchange rate risk exposure from our
3
costs and sales is related to the Japanese Yen and the Singapore Dollar. For example, based on our results
of operations for the year ended December 31, 2014, an appreciation of the Euro against the U.S. Dollar
of $ 0.01 on an annual basis would have resulted in an estimated decrease of approximately A 5 million in
our sales, and thereof approximately A 4 million would have impacted our earnings before tax.
We attempt to mitigate the effects of foreign currency fluctuations on our business by entering into foreign
currency hedging contracts. While we attempt to hedge around half of our foreign exchange rate risk
exposure, we may be subject to risks of losses if we hedge incorrectly or should be unable to use hedging
contracts to mitigate long-term unfavorable movements in exchange rates. Hedging contracts can subject
us to risks of losses if the values of the hedged currencies move other than as we expected when we entered
into the contracts. We may also not be able to hedge our foreign exchange rate risk effectively because of
the application of accounting rules, unfavorable market trends or currency or derivative positions. Further,
while we try to limit our exposure to individual counterparties, we might face counterparty risks, i.e. the
risk that a counterparty to a hedging transaction fails to fulfill its obligations. In the very long-term, we
intend to mitigate the foreign exchange rate risk by the relocation of our cost base to Asia and by entering
into more supply agreements denominated in U.S. Dollars.
In addition, because the majority of our sales are denominated in U.S. Dollars, if one or more competitors
sell to our customers in a different currency than U.S. Dollars, we are subject to the risk that the
competitors’ products will be relatively less expensive than our product offering. Thus we may also be
indirectly impacted by movements in the exchange rates of other currencies. Although our exposure to the
Japanese Yen is limited, our largest competitors are both based in Japan and together supply more than
50 percent of the wafer market, with large volumes of their production cost denominated in Japanese Yen.
Therefore, a depreciating Japanese Yen compared to the Euro and U.S. Dollar is more beneficial to our
larger competitors and vice versa. Any impact of foreign exchange rate movements which benefit our
competitors is difficult to anticipate and one against which we do not hedge, but which could still influence
market prices and thus significantly affect our results and financial condition.
We are also exposed to translation risks. Our translation risks result from the necessity to convert
non-Euro based assets, liabilities, sales and expenses of a substantial portion of our foreign operations into
Euro at applicable exchange rates. Consequently, increases or decreases in the value of the Euro may
affect the value of these items with respect to our non-Euro businesses in our financial statements, even if
their value remains unchanged in their local currency. If the U.S. Dollar weakens compared to the Euro or
should other exchange rate parities relevant for us change significantly to the detriment of our Group, such
a development could materially adversely affect our business, net assets, financial condition and results of
operations.
We have suffered losses in the recent past and we may not generate profits in the future.
We reported net profit of A 1.9 million for the three months ended 31 March 2015, but net losses of
A 27.0 million for the year ended 2014, A 109.3 million in the year ended 2013 and A 90.6 million the year
ended 2012. We were unable to influence a number of factors which led to these losses such as the
continued decline in wafer prices, the volatile and cyclical nature of the semiconductor industry, increasing
competition, unfavorable development of currency exchange rates and cost for electricity trending upward.
In the future, our financing costs could also increase and increasing prices for raw materials and supplies
could lead to higher expenses.
Due to the capital intensive nature of our business, we have high fixed costs for our operations. In addition,
we currently operate our manufacturing facilities at a high utilization with limited room to increase volume
at our existing facilities. As a result, our strategy focuses on cost reductions and efficiency improvements
intended to improve our margins. We have concentrated our efforts on factors, over which we have a
greater influence, such as those related to labor, capacity utilization, production efficiency and adjustments
to meet our customer demands. We have accordingly implemented several initiatives in recent years
designed to achieve cost reductions and manage our production capacity to meet demand more efficiently.
In order to further reduce costs, we intend to continue to follow our cost reduction roadmap. We may be
unable to achieve these cost reductions, especially in the face of continuing declines in the prices of
semiconductor silicon wafers, even as we manage our costs through means such as headcount reductions or
process optimization. In addition, we may be unable to cut costs further because we have already exploited
the most effective cost reduction measures. If we are unable to achieve further cost reductions or if factors
beyond our influence, such as increased energy costs or higher borrowing costs, adversely affect us, we may
remain loss making and may not succeed in our effort to generate profits in the future. In addition, if we
4
incur losses in the future or if we report quarterly or annual results that do not meet the expectations of
industry analysts or are weaker than those reported by our competitors, our share price is likely to fall.
We face intense competition within our industry and our competitors may introduce new wafer generations and
specifications faster than we do, at lower prices or with better performance characteristics, or may manage to reduce
their costs at a greater rate than we do, or benefit from support from corporate parents. Our failure to compete
effectively could materially adversely affect our business, net assets, financial condition and results of operations.
The market for semiconductor silicon wafers is highly competitive. A number of our competitors which
include Shin-Etsu Handotai, SUMCO Corporation, SunEdison Semiconductor and LG Siltron may have
considerable financial strength, enabling them to withstand long-term aggressive price competition or a
prolonged slump in the semiconductor silicon wafer market. Some of our competitors might also benefit
from the financial support of a conglomerate which can provide liquidity during downturns or periods of
rapid price declines. In addition, some of our competitors may possess qualities enabling them to develop a
semiconductor silicon wafer offering that may currently, and in the future, compete favorably against our
offering in terms of design, quality and performance. Such qualities may include greater financial,
technical, engineering and manufacturing resources, more efficient cost structures, higher brand
recognition, newer manufacturing equipment, larger customer bases and more diversified product lines.
Our larger competitors may also produce wafers at a lower per unit cost due to their larger market share
and economies of scale and may have a more efficient cost base as they incur costs in the same currency as
the majority of their sales. This could lead to higher margins and higher profitability and might also enable
them to increase their respective market shares by reducing their margin expectations and/or by increasing
their capacity. An increase in the capacity of a competitor might result in higher supply and lower average
selling prices, leading in turn to a downward pressure on our margins. We expect that all our competitors
will improve the design and performance of their wafers. If our competitors introduce new wafer
generations and specifications faster than we do at lower prices or with better performance characteristics,
our business, net assets, financial condition and results of operations could be materially affected.
Furthermore, competition in the semiconductor silicon wafer industry may increase as a result of new
competitors who enter the market for semiconductor silicon wafers, in particular with regard to 200 mm
and smaller diameter wafers. For example, companies could begin producing standardized products in
countries with low wages. Our existing competitors may acquire capacity to manufacture semiconductor
silicon wafers with certain specifications or may invest in expanding capacity based on new technologies, in
particular with regard to 300 mm wafer diameters. On the one hand, manufacturers which currently do not
have a complete production line, but nevertheless offer individual steps of semiconductor silicon wafer
production (such as refining semiconductor silicon wafers), could increasingly enter the market for
semiconductor silicon wafers. On the other hand, consolidation in the 200 mm or 300 mm diameter wafer
market may take place, resulting in larger competitors which may be able to gain economies of scale and
lower their costs of production enabling them to compete more favorably against our semiconductor
silicon wafer offering.
Increased competition in the semiconductor silicon wafer industry and our failure to compete effectively
could materially adversely affect our business, net assets, financial condition and results of operations.
The manufacturing processes of semiconductor silicon wafers are very complex and potentially vulnerable to
impurities, operational disruptions or inefficient implementation of production changes. Any defect in quality could
lead to loss of sales and to liability claims.
Our manufacturing processes are highly complex, require advanced and increasingly costly equipment and
are continuously being modified or maintained in an effort to improve yields, efficiency and product
performance. The semiconductor silicon wafers manufactured by us must meet exacting quality standards
and customer specifications. In addition, as system complexity and production changes have increased,
manufacturing tolerances have decreased and requirements for precision have increased. Our customers
require us to produce semiconductor silicon wafers in a tightly controlled, clean environment. Even small
impurities in the manufacturing process can cause a substantial percentage of wafers to be rejected or
numerous semiconductor chips on each wafer to be nonfunctional. Despite all our efforts and although we
have not experienced any bottlenecks and production difficulties to a material extent recently, we have,
from time to time, experienced bottlenecks and production difficulties causing delivery delays and quality
control problems. We may experience bottlenecks or production or transition difficulties in the future if,
for example, we produce semiconductor silicon wafers that do not meet our customer specifications, that
contain or are perceived to contain defects in quality, or that are otherwise incompatible with their
5
intended uses. This risk is even higher for the implementation of new wafer specifications and changes in
our manufacturing processes due to technological advancements and the implementation of efficiency
improvement measures. We may incur substantial costs in remedying such defects or errors. Moreover, if
actual or perceived problems with nonconforming, defective or incompatible wafers occur after we have
shipped the products, we might bear direct liability for providing replacements or otherwise compensating
customers. Furthermore, the customer in these cases may temporarily suspend all purchases of our wafers.
In addition, a customer may revoke the qualification of our facilities for certain products as a result of
quality defects and would then no longer purchase the products from those manufacturing facilities until
the causes of the quality defects were eliminated and the manufacturing facilities were re-qualified. This
risk increases if we have not obtained qualifications for other production facilities from a customer.
Quality defects may also damage the market acceptance of our remaining products.
In addition, quality defects may arise in the future. Such occurrences could lead to losses in sales, the loss
of key customers, the loss of a production facility’s qualification for products of one or more customers or
the loss of market acceptance. Furthermore, they could result in liability relating to any defects or
consequential damages (including those arising under product liability claims). Any of these could
Because our customers generally require that our facilities be qualified before we can begin manufacturing products
for them, we may face delays in or cancellations of shipments of wafers, which could result in lost sales and damage
to customer relationships.
It typically takes six to twelve months for our customers to qualify one of our manufacturing facilities to
produce a specific product but can take even longer depending upon a customer’s requirements and
situation. If only one facility is qualified to manufacture a product, an interruption of operations or limited
available capacity at any of our manufacturing facilities could result in delays in or cancellations of
shipments of products. Even where multiple sites are qualified for a particular product, production could
be interrupted at each such site simultaneously as a number of factors could cause interruptions or limit
capacity at a facility, including our own efforts to maintain facilities or temporary closures to production
lines for extension, retooling, calibration, capacity expansion or other modifications. Contaminations,
extreme weather conditions, equipment and power failures, shortages of raw materials or supplies or
transportation logistic complications can also inhibit our production. If interruptions are severe, or if wafer
quality is affected, we could even lose qualification at our facilities, requiring us to requalify before we can
sell our semiconductor silicon wafers to customers. If we lose qualifications or experience an interruption
or limited capacity at any of our manufacturing facilities for any reason, we could lose sales and experience
damage to customer relationships. This could materially adversely affect our business, net assets, financial
We have in the past and may in the future implement initiatives designed to achieve cost reductions and to manage
our production capacity to meet demand efficiently. We may fail to realize the full benefits of, and could incur
significant costs relating to, any such initiatives.
We have implemented several initiatives in recent years focused on the reduction of our fixed, variable and
services costs by leveraging the production footprint and strategic capacity management in order to meet
demand efficiently. Through these initiatives we have secured total cost reductions of more than
A 80 million from 2012 to 2013 (based on an application of the 2012 cost basis to 2013 volumes,
adjustments to certain 2013 costs to reflect 2012 contractual and economic parameters (e.g. 2012 unit labor
cost), and excluding Siltronic Silicon Wafer Pte. Ltd. (‘‘SSW’’), initially a joint venture with Samsung Asia
Pte. Ltd. (formerly Samsung Electronics Asia Holding Pte Ltd.), a wholly-owned subsidiary of Samsung
Electronics Co. Ltd. (together with its affiliates ‘‘Samsung’’)) and additional savings of approximately
cost), and including SSW beginning as of January 24, 2014). These measures included:
•
site closure in Japan (Hikari) and consolidations in the United States (Portland) and Germany
(Burghausen) in 2011 and 2012;
•
the variable cost reduction program for 300 mm wafers since 2010;
•
the fixed cost and labor reduction program for the manufacturing of wafers with diameters for less
than 200 mm in Germany since 2012; and
6
•
the reduction of services cost for services provided by Wacker Chemie AG, including at our
production site in Burghausen.
In addition, we have seen significant cost reductions from optimizing process yields with respect to
polysilicon. To further reduce costs, we intend to continue to follow our cost reduction roadmap, in
particular focusing on process improvements, improvements of processing yields, the optimized use of
polysilicon and disciplined capital allocation with regard to R&D, selective upgrades of equipment and
capacity adjustments.
We may not realize the intended cost savings and productivity improvements as a result of our ongoing or
future restructuring and cost improvement initiatives. Future initiatives to transfer or consolidate
manufacturing operations could also involve significant start-up or qualification (or re-qualification) costs
for new or repurposed facilities, which may be difficult to fund if our cash flow is limited or if our ability to
access financing on favorable terms is insufficient. In addition, as a public company, we will incur
additional costs in connection with compliance, investor relations and legal services. As a result, we will
need to divert substantial resources, including management time, away from cost savings and productivity
improvements to these activities, which might dilute the effects of our cost reduction initiatives. We also
reported losses in the recent past and our failure to realize the full benefits of, or the incurrence of
significant costs relating to, our cost reduction initiatives could hinder our effort to generate profits in the
future and thereby materially adversely affect our business, net assets, financial condition and results of
operations.
We may not realize the savings or productivity improvements that we expect to gain from any future discontinuances
of production lines or closures of production sites. This may materially adversely affect our business, net assets,
Due to our constant adaptation to changes in our customers’ requirements, the strong competition we face
and our goal to optimize resources and production capacity, we may periodically discontinue entire
production lines or close production sites in order to improve the efficiency of our operations. We may,
however, not be able to realize any expected savings or productivity improvements from these activities,
may incur unexpected costs or suffer accelerated depreciation of or impairments on our assets, may incur
significant restructuring charges or may be required to make severance payments to employees affected by
these activities. For example, following the shutdown of our production site in Hikari, Japan, in 2012, we
have been unable to sell the property. It may prove necessary to deconstruct the buildings currently on the
site. If we are unable to realize proceeds from the sale of the property that exceed any potential
deconstruction costs, we will incur a loss. If the laws governing environmental protection with regard to
existing contaminations on our properties change in the future or if we identify currently unknown
contamination on our properties, including owned, but unused property such as our closed Hikari site, we
may also incur environmental liabilities. Furthermore, our cost reduction roadmap includes the reduction
of our workforce in Germany. In this connection, we entered into a labor support agreement with Wacker
Chemie AG, under which it will assume without recourse up to 500 employees from Siltronic AG
(including all compensation obligations resulting from their employment by us other than any
compensation which has already vested at the time of employment by Wacker Chemie AG) over a six year
period (until 2019) against an upfront payment of A 39 million. This sum was paid in 2014. However,
Wacker Chemie AG may not take all employees as agreed in the labor support agreement due to labor law
regulations or other reasons. Even though Wacker Chemie AG will be required to reimburse us for every
employee not taken in accordance with the labor support agreement, these reimbursements may be
insufficient to cover the costs to us of these retained employees. We may incur additional expenses due to
higher costs in connection with pension obligations, social plan compensation costs and subsequent
changes to our company-specific collective bargaining agreement (unternehmensbezogener
Verbandstarifvertrag). We may also experience adverse effects on our working environment in connection
with the implementation of a social plan. Any of these additional expenses could prevent us from achieving
the cost reductions set forth in our cost reduction roadmap.
We therefore bear the risk of restructuring charges, impairments and other costs in connection with these
activities which could materially adversely affect our business, net assets, financial condition and results of
operations.
7
Because we do not generally have long-term agreements with our customers and our customers generally are not
obligated to purchase a minimum quantity of semiconductor silicon wafers from us, we could fail to match our
production with our customers’ demand. This could result in a lower capacity utilization of our manufacturing
facilities and fixed costs in excess of our sales and materially adversely affect our business, net assets, financial
It is not industry practice to enter into firm, long-term written purchase agreements with respect to
semiconductor silicon wafers. Sales to our customers are generally governed by purchase orders or, in
certain cases, short-term agreements that include pricing terms and estimated quantity requirements. We
primarily use internal forecasts to determine the number and mix of products we manufacture. Although
we also consult with major customers, customers may cancel orders or reduce quantities for a number of
reasons, including price declines in a competitor’s product offerings or decreasing demand due to cyclical
trends in the semiconductor industry. Additionally, a customer may discontinue their relationship with us
at any time.
If we overestimate demand for a particular semiconductor silicon wafer, we may need to reduce the price
for that semiconductor silicon wafer significantly in order to sell our excess inventory. If we are unable to
predict accurately the appropriate amount of products needed to meet customer requirements, or if our
customers were to unexpectedly cancel or reduce a large number of orders simultaneously, we could fail to
match our production with our customers’ demand, resulting in a lower capacity utilization of our
manufacturing facilities and fixed costs in excess of our sales. This could materially adversely affect our
We are dependent on the demand of our top customers and a significant reduction in, or loss of, purchases or failure
to pay by any of our top customers could materially adversely affect our business, net assets, financial condition and
For the year ended December 31, 2014, our top two customers accounted for approximately 14 percent and
13 percent, respectively, and our top ten customers accounted for approximately 64 percent, of our sales to
non-affiliates. As sales to our customers are generally governed by purchase orders or, in certain cases,
short-term agreements, we are exposed to the risk of reduced sales if our customers reduce their demand
for our products, including as a result of cyclical fluctuations or competitive factors. Although we are
seeking to broaden our customer base, there is a limited number of major manufacturers that purchase
semiconductor silicon wafers in large quantities, and most of them are existing customers of ours. Our
major customers generally seek to maintain multiple sources of supply, making it difficult for us to
meaningfully increase our current sales volumes of existing products to them where to do so would move
us towards being an exclusive source for them. In addition, we might be exposed to a payment default of
one of our top customers. Our business, net assets, financial condition and results of operations could
materially suffer if we experience a significant reduction in, or loss of, purchases by, or experience a failure
to pay by any of our top customers.
In addition, the majority of the goods produced by SSW in 2014 were purchased by Samsung, SSW’s
non-controlling shareholder. The wafer purchase agreement entered into between SSW and Samsung
includes a minimum purchase obligation of Samsung which accounts for more than half of SSW’s actual
current production capacity of wafers and had an initial term until November 2016 and was automatically
renewed to November 2018. If Samsung purchases less than the agreed amount of wafers or if we are not
able to extend the wafer purchase agreement with Samsung beyond November 2018 and we are not able to
allocate SSW’s wafer production to other customers, this could materially adversely affect our business, net
Polysilicon, our key raw material, as well as other ancillary materials, machinery and replacement parts, are offered
by only a limited number of suppliers, exposing us to risk of delivery disruptions and price increases.
Polysilicon is by far the most important raw material for our business. Our ability to meet our customers’
demand for our products depends upon obtaining adequate supplies of quality raw materials on a timely
basis. We purchase the largest amount of our polysilicon requirements from Wacker Chemie AG on the
basis of long-term agreements between Wacker Chemie AG and us and Wacker Chemie AG and our
Singaporean subsidiary SSW. These supply agreements cover 100 percent of the polysilicon demand of our
subsidiary SSW until 2019 and approximately 90 percent of the Company’s needs until 2020. If for any
reason Wacker Chemie AG is unable to meet our demand for polysilicon, we will be required to seek other
suppliers, which could result in manufacturing delays, an increase in our costs relating to obtaining
8
polysilicon or a decrease in our manufacturing throughput or yields. Such an occurrence could materially
adversely affect our business, net assets, financial condition and results of operations.
Apart from Wacker Chemie AG, there are only a few other significant suppliers of semiconductor grade
polysilicon in the world. Due to the limited number of alternative suppliers, the market price for
polysilicon may develop unfavorably. There is also a risk that the demand for polysilicon will increase in
the future and that there will be an insufficient supply of polysilicon in the market (as was the case in 2006
and 2007 due to an increased demand for polysilicon used in the solar industry). An increase in demand for
polysilicon could prevent us from purchasing the amount of polysilicon required or could force us to pay
excessive prices in order to purchase polysilicon. A negative development in the market price for
polysilicon or disruptions in the delivery of polysilicon could result in manufacturing delays, an increase in
our costs relating to obtaining polysilicon or a decrease in our manufacturing throughput or yields, thereby
materially adversely affecting our business, net assets, financial condition and results of operations.
For a number of other ancillary materials, machinery or replacement parts we rely on a limited number, or
in certain cases a single source, of suppliers due to a high degree of sophistication and customization of the
required equipment. It is therefore difficult for us to rapidly substitute one supplier for another or one
piece of equipment for another. Furthermore, our machinery and tooling setups use many small parts for
which there are only single suppliers or, in some cases, there are no longer any suppliers that could supply
spare parts or secure repair or replacement pieces. A prolonged inability to manufacture or obtain such
materials, equipment or supplies, or increases in prices resulting from shortages of these materials could
We may not be able to match our production output to demand for our semiconductor silicon wafers, which could
result in a shortage or excess of manufacturing capacity. This could materially adversely affect our business, net
assets, financial condition or results of operations.
Due to the cyclicality and volatility of the semiconductor industry and the capital-intensive nature of our
business, it is difficult for us to predict future requirements for our semiconductor silicon wafer offering
and manufacturing capacity.
During periods of high demand for our semiconductor silicon wafers and new wafer specifications
(e.g. diameters, roughness, purity, etc.), we may experience a shortage of capacity and an increase in lead
times for delivery of our wafer offerings to our customers. This is particularly true with regard to any
increase of 300 mm wafer production. As we already operate our manufacturing facilities at a high
capacity, we may be required to significantly expand our production capability or add capacity to meet
volume demand. We could address this based on already existing open shell capacity at our facilities in a
relatively short time period, or by constructing new facilities. This may result in significant, unplanned
expenditures that could negatively affect our results of operations. It typically takes up to six months to
reequip existing shell capacity and up to four years to plan, finance, construct and equip a new facility.
Therefore, we must make a decision to build a new facility, or to reequip an existing facility, with no
reliable forecast of what the supply, demand ratio and price levels are likely to be when the facility is
scheduled to begin operation. We may also not have the sufficient financial resources to finance
manufacturing capacity increases. If an increase of our manufacturing capacity should prove necessary, our
failure to ramp up our production on a timely basis or at all may result in loss of sales or customers and a
loss of market share. This could in turn reduce our ability to exploit economies of scale, negatively
affecting both our cost position and our ability to finance investments in the future.
Furthermore, if one or more of our competitors bring one or more large new facilities on stream, there is a
risk that the resulting supply growth would exceed demand at that point in time, which could result in
strongly reduced prices for our wafer product offering. If prices drop we may require significant time to
recoup our investments, or we may not be able to do so at all.
Increases in our manufacturing capacity based on anticipated growth in demand for our semiconductor
silicon wafer offerings may exceed the actual demand of our customers, resulting in excess capacity and
falling average selling prices. High fixed costs of operating our manufacturing facilities, strongly reduced
average selling prices for our wafer product offering due to over-capacity, the general decline of average
selling prices of wafers after the introduction of a new semiconductor silicon wafer generation or other
reasons may result in lower capacity utilization of our manufacturing facilities, excessive fixed costs and
decreased or negative margins on the inventory we produce. If we have just made significant investments in
new production facilities or reequipping an existing facility, it may take longer for us to recoup our
investments, or we may not be able to do so at all.
9
Any of these outcomes could materially adversely affect our business, net assets, financial condition or
Because we manufacture and sell a substantial portion of our products outside of Germany, we are subject to the
risks of doing business internationally, including periodic foreign economic downturns and political instability,
which may adversely affect our sales and cost of doing business in those regions of the world.
Foreign economic downturns have affected our results of operations in the past and could affect our results
of operations in the future. In addition, other factors relating to the operation of our business outside of
Germany could materially adversely affect our business, net assets, financial condition and results of
operations in the future, including:
•
fluctuations in exchange rates;
•
the imposition of governmental controls or changes in government regulations, including tax
regulations;
•
difficulties in enforcing our intellectual property rights;
•
export license requirements;
•
restrictions on the export of technology;
•
compliance with U.S. and international laws involving international operations, including the Foreign
Corrupt Practices Act and export control laws;
•
difficulties in achieving headcount reductions due to unionized labor and works councils;
•
restrictions on transfers of funds and assets between jurisdictions;
•
geo-political instability; and
•
trade restrictions, import/export duties and changes in tariffs.
In the future we may seek to expand our sales in certain foreign markets or enter emerging markets.
Evaluating or entering into an emerging market may require considerable management time, as well as
start-up expenses for market development, before any significant sales and earnings are generated.
Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in
existing markets may be affected by local political, economic and market conditions. As we continue to
operate our business globally, our success will depend, in part, on our ability to anticipate and effectively
manage these and the other risks noted above. The impact of any one or more of these factors could
We may misallocate our research and development resources or have insufficient resources to conduct the necessary
level of research and development to remain competitive, which could materially adversely affect our business, net
We may devote research and development resources to technologies or products that turn out to be
unsuccessful. Commitments to developing any new product must be made well in advance of sales, and
customer demands and technology may change while we are in development, rendering our products
outdated or uncompetitive before their introduction. We must therefore anticipate both future demand
and the technology features that will be required to supply such demand. If our revenue decreases
significantly or if we incur losses as a result of a market downturn or otherwise, we may not be able to
devote sufficient resources to the research and development needed to remain competitive. Our failure to
properly allocate research and development resources could materially adversely affect our business, net
We may be unable to finance our capital expenditures or investments for research and development due to our
inability to find financing on favorable terms. Such a development could materially adversely affect our business,
We believe that we will be able to finance our ongoing capital expenditures and planned investments,
including investments in research and development, from cash generated from operations and excess cash
on the balance sheet not needed for the repayment of our outstanding credit facility as a result of the
A 150 million gross proceeds of the Offering (assuming the issuance of 4,411,765 New Shares placed at the
mid-point of the price range). If we are unable to finance planned or any other additional investments
10
from these sources, we would have to obtain necessary funds (i) in the form of loans, (ii) in the capital
markets, (iii) pursuant to a raise in additional equity, or (iv) a combination of the above.
If we are unable to finance our capital expenditures or investments for research and development due to
our inability to find financing on favorable terms, such a development could materially adversely affect our
Natural disasters and other unforeseeable events could result in delays in or cancellations of shipments of products
and lead to a loss of customer qualification of production facilities and thereby negatively affect our business
activities.
Some of our production sites are exposed to an increased risk of natural disasters. For example, our
production facilities in the United States (Portland) are situated in an earthquake zone and exposed
directly or indirectly to risks of flooding. In addition, all of our production sites are exposed to risks of
operational disturbances and disruptions as a result of unforeseeable events or force majeure such as fire,
lightning or explosions. Any such events or natural disasters could lead to a loss of customer qualification
of certain production facilities, resulting in significant revenue losses. This is in particular relevant in the
event only one facility is qualified to manufacture such products. Even if more than one site is qualified for
a particular product, an interruption of operations or lack of available capacity at any of our manufacturing
facilities could result in delays in or cancellations of shipments of products. This risk is increased as we
have only four production sites concentrated in three countries (Germany, United States and Singapore).
In the case that such events or similar natural disasters or unforeseeable events occur and result in
damages and losses which are not completely reimbursed by our insurance policies or for which we are not
insured, these events could materially adversely affect our business, net assets, financial condition and
We could sustain substantial losses from damage not covered by, or exceeding the coverage limits of, our insurance
policies.
Insurance policies taken out by us, including against fire, natural disasters, operational interruptions and
third-party liability, are subject to exclusions and limitations of liability both in amount and with respect to
the insured events. In particular, such exclusions include damages from acts of war, acts of terrorism,
flooding and damages from nuclear energy. Our assessment that we are sufficiently insured against
contingencies may not be accurate. In addition, our insurance providers could become insolvent. Floods,
fires, storms and similar natural disasters or other events may cause damage to a property or production
facility in excess of insurance coverage and may thus lead to significant costs in connection with
remediation and repair work that must be borne by us. If we suffer a loss or incur a liability against which
we are uninsured or insufficiently insured, this could adversely affect our business, net assets, financial
Our information technology systems could malfunction or become impaired, which could materially adversely affect
our business, net assets, financial condition and results of operations.
Our information technology systems are essential for our business operations and success. For example, we
provide our customers with single wafer traceability and about two megabyte of data per 300 mm wafer,
which results in a data volume for us of more than 10 terabytes per year. Any interruptions in, failures of or
damage to our information technology systems could lead to delays or interruptions in our business
processes. In particular, our information technology systems may be vulnerable to security breaches and
cyber-attacks from unauthorized persons outside and within our Group. These may include malicious
hacking by unknown persons, and could also include attempts to steal data or manipulate our systems by
our employees, competitors or other third parties. Any malfunction or impairment of our computer
systems could interrupt our operations, lead to increased costs and may result in lost revenue. We cannot
guarantee that anticipated and/or recognized malfunctions can be avoided by appropriate preventive
security measures in every case. The materialization of one or more of these risks could materially
adversely affect our business, net assets, financial condition and results of operations.
11
We might not be in a position to protect our proprietary intellectual property, in particular patents and
non-patentable business secrets, or to use technologies, if they constitute protected third-party intellectual property,
and in such a case, we may be unable to obtain licenses or execute cross-licensing agreements covering such
intellectual property.
Our business depends on our proprietary technology and know-how and we possess a large number of
patents of considerable importance to our business. Even though the law generally presumes the validity of
patents, we cannot be certain that the claims allowed with respect to any patents held by us will be broad
enough to protect our technology or that foreign intellectual property laws will adequately protect our
intellectual property rights. Moreover, there is no guarantee that all patents applied for or expected to be
applied for by us concerning our new technologies will be granted or that these will not be challenged by
third parties. For example, one of our patents is currently being challenged by a competitor in Denmark.
Thus, our patents may not provide effective legal protection against our competitors. This may especially
be the case if individuals and groups that are not active in the manufacturing or other operating aspects of
our industry have acquired patents and other intellectual property assets and conduct a business of
litigating claims of infringement. Furthermore, third parties may infringe on our patents. Inadequate
protection or an infringement of our intellectual property rights could limit us in our ability to profitably
exploit the technological advances obtained as a result of costly research and development.
In addition, non-patented business secrets and confidential know-how are important for our scientific and
commercial success. Although we endeavor to protect our business secrets by relying on the laws
protecting business and trade secrets, by executing confidentiality agreements with business partners, key
employees and advisors and by taking other appropriate courses of action, there is no guarantee that our
actions will prevent disclosure of our business secrets or that third parties will not develop similar or
identical know-how independently of us or gain access to such know-how.
Furthermore, certain technologies, which appear promising or which are required for our business
operations, could be covered by patents held by third parties. If so, our access to such technologies will
depend upon our ability to successfully challenge such patents, acquire licenses or execute cross-license
agreements. The license payments required under such licenses will increase our costs.
Each of these factors could materially adversely affect our business, net assets, financial condition and
Our implementation of the planned process steps for the production of semiconductor silicon wafers could infringe
competitors’ patents and we may be required to pay substantial damages, seek licenses from others, or change or
stop producing some of our products. Any delivery restrictions resulting from patent litigation or disruptions in
production as a result of reorganizing the manufacturing process or subsequent procurement of relevant licenses
could materially adversely affect our business, net assets, financial condition and results of operations.
Any litigation to enforce patents issued to us or for which we have sought registration, to protect trade
secrets or know-how possessed by us, to defend ourselves or to indemnify others against claimed
infringement of the rights of others could materially adversely affect our business, financial condition and
results of operations. Since our competitors register and receive protection under a large number of
patents, our competitors may allege that we may be infringing certain of their patents or other rights. As a
consequence, we may be compelled to reorganize our planned or previously implemented manufacturing
processes or to procure a license. If we are unable to resolve these matters satisfactorily, or to obtain
licenses on acceptable terms, we may face litigation on which we may need to expend significant time and,
if we lose any such litigation where we are alleged to infringe the rights of others, we may be required to
pay substantial damages, seek licenses from others, or change or stop producing some of our products. Any
delivery restrictions resulting from patent litigation, from disruptions in production as a result of
reorganizing the manufacturing process or from subsequent procurement of relevant licenses could
We may become involved in litigation and regulatory proceedings, which could require significant attention from
our management and result in significant expense to us and disruptions in our business.
We were in the past and may in the future be involved in lawsuits and regulatory actions relating to our
business, such as commercial contract claims, employment claims and tax audits or other examinations and
investigations. Some of these proceedings may claim significant damages or cause reputational harm. Due
to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the
ultimate outcome of any proceeding. An unfavorable outcome could materially adversely affect our
12
business, financial condition and results of operations or limit our ability to engage in certain of our
business activities. In addition, regardless of the outcome of any litigation or regulatory proceeding, any
proceedings are often expensive, time-consuming, disruptive to normal business operations and require
significant attention from our management.
Any future acquisitions and any strategic alliances may present integration challenges, harm our results of
operations, cause us to incur debt or assume contingent liabilities or dilute our shareholders.
If we find appropriate opportunities in the future, we may acquire, invest in, or enter into strategic
alliances relating to other businesses, products or technologies that we believe are strategic. For example,
we established SSW as a joint venture with Samsung in 2006 and, in 2014, increased our ownership in the
subsidiary to 78 percent, thereby gaining control. This also resulted in our consolidating SSW’s results with
our Group’s results starting January 24, 2014. Successful acquisitions and alliances in the semiconductor
silicon wafer industry are difficult to accomplish because they require, among other things, efficient
integration and alignment of product offerings and manufacturing operations and coordination of selling
and marketing and research and development efforts. The difficulties of integration and alignment may be
increased by the necessity of coordinating geographically separated organizations, the complexity of the
technologies being integrated and aligned, the necessity of integrating personnel with disparate business
backgrounds and combining different corporate cultures. The integration and alignment of operations
following an acquisition or alliance requires the dedication of management resources that may distract
attention from day-to-day operations and may disrupt key research and development, marketing or sales
efforts. In addition, we may issue equity securities to pay for future acquisitions or alliances, which could
be dilutive to existing shareholders. We may also incur debt or assume contingent liabilities in connection
with acquisitions and alliances, which could harm our results of operations. In addition, acquisitions
involve numerous risks, including:
•
risks of entering markets in which we have no direct or limited prior experience;
•
the potential loss of key employees of the acquired company; and
•
in the case of the acquisition of financially troubled businesses, challenges as to the validity of such
acquisitions from third party creditors of such businesses.
We may be unable to successfully recruit and retain qualified employees, which could materially adversely affect our
To a large extent, we depend on highly qualified employees in the areas of research and development,
technology, sales and executive personnel. Our management team has significant industry experience
which would be difficult to replace. These individuals possess sales, marketing, engineering,
manufacturing, financial and administrative skills that are critical to the operation of our business. In
addition, in recent years, competition for employees with scientific, technical or industry-specific
know-how has become very competitive. Our future success will depend on our ability to recruit and retain
highly qualified employees. The loss of the services of any of our key employees or the failure to attract or
retain other qualified personnel could materially adversely affect our business, net assets, financial
We are subject to environmental laws and regulations, which could require us to incur environmental liabilities,
increase our manufacturing and related compliance costs or otherwise materially adversely affect our business, net
We are subject to a variety of national and foreign laws and regulations governing the protection of the
environment. These environmental laws and regulations include those relating to the use, storage,
handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardous materials
used in the production of semiconductor silicon wafers. If these substances were to leak into the soil or
groundwater at the various properties on which our facilities are located or otherwise contaminate the
environment, we may be liable and could incur significant costs, including clean-up costs, fines and civil or
criminal sanctions, third-party property damage or personal injury claims. We may also be liable and incur
significant costs for our properties that have pre-existing contamination and may be responsible for
remediating such contamination.
Our subsidiary Siltronic Corporation is currently addressing environmental contaminations at, and
migrating from, its Portland, Oregon facility (the ‘‘Portland Property’’). This includes the investigation of
13
releases of certain contaminants, including trichloroethylene (‘‘TCE’’) that was formerly used by our
subsidiary at the Portland Property. Furthermore, prior owners of the Portland Property caused releases of
manufactured gas plant (‘‘MGP’’) wastes, herbicides, pesticides, and petroleum products, and other
hazardous substances. In addition, our subsidiary is a potentially responsible party that may have liability
for the contamination of the Portland Harbor.
Our subsidiary has insurance coverage that has provided reimbursement for the majority of the defense,
investigation and remediation costs that our subsidiary has incurred to date. Although substantial coverage
remains, future defense, investigation and remediation costs may not be fully reimbursed by the insurance
coverage. In addition, we have had to litigate coverage issues with our insurance companies, and although
we have had rulings which we believe to be favorable, we are still in discussions with several of our
insurance providers regarding their coverage for remediation and litigation costs. A negative outcome in
these discussions could reduce the amount of remaining coverage for costs relating to the Portland
Property or other environmental issues.
Because there have not been determinations of the nature or extent of the further investigations and
remediation efforts that will be required, we believe that it is not possible to reasonably estimate the
amount or range of costs which our subsidiary may incur in connection with the contamination at the
Portland Property and the Portland Harbor. However, if these costs are not or not fully covered by our
insurance coverage, they could materially adversely affect our business, net assets, financial condition and
results of operations. While our subsidiary has resisted actions that could impact its infrastructure at the
Portland Property, future regulatory actions could also adversely affect this infrastructure.
The laws and regulations governing environmental protection and environmental responsibilities may
become more stringent in the future, which would expose us to additional liability risks under future
legislation or for currently unidentified contamination.
We are subject to the general tax environment in Germany. Our tax burden may increase as a consequence of future
tax treatment of dividend payments, future tax assessments, tax audits or court proceedings based on changes in tax
laws or changes in the application or interpretation of tax laws. We are subject to possible future changes in the
taxation of enterprises in Germany and in the European Union.
We are subject to the general tax environment in Germany. Our tax burden depends on various aspects of
tax laws, as well as their application and interpretation; for instance transfer pricing. Tax planning and
optimization depends on the current and expected tax environment. Amendments to tax laws may have a
retroactive effect and tax authorities or courts could apply or interpret the laws unexpectedly.
Furthermore, court decisions are occasionally limited to their specific facts by tax authorities by way of
non-application decrees. This may also increase our tax burden.
From January 1, 2009 until December 31, 2014, we were a consolidated subsidiary for corporate income
and trade tax purposes (fiscal unity) with the Wacker group due to a profit and loss transfer agreement
entered into with Wacker-Chemie Dritte Venture GmbH. As such and to this extent, we were not a taxable
entity.
We were regularly subject to tax audits in Germany. The most recent tax audit on Wacker Chemie AG’s tax
return (under which Siltronic AG was included) for the years up to and including 2009 was concluded in
2014. Tax audits following the cancellation of the fiscal unity with Wacker Chemie AG and other
investigations conducted by the competent tax authorities could result in the assessment of additional
taxes. In particular, this may be the case for changes in our shareholder structure, other reorganization
measures or impairment on properties on which tax authorities could disregard for tax purposes.
Furthermore, expenses could be treated as non-deductible. Any of these findings could lead to an increase
in our tax obligations and could result in the assessment of penalties. We may become party to tax
proceedings. The outcome of such tax proceedings may not be predictable and may be detrimental to us.
The materialization of any of these risks could materially adversely affect our business, net assets, financial
We are exposed to a number of different tax uncertainties, which could have an impact on tax results.
We are required to pay taxes in multiple jurisdictions. We determine the amount of taxes based on our
interpretation of the applicable tax laws and regulations in the jurisdictions in which we operate. We may
be subject to unfavorable changes in the respective tax laws and regulations in some jurisdictions. Tax
controls, audits, change in controls and changes in tax laws, changes in regulations or changes in the
14
interpretation given to tax laws or regulations may expose us to negative tax consequences, including
interest payments and penalties. We have issued transfer-pricing directives in the area of goods, services
and financing, which are in accordance with the Guidelines of the Organization of Economic Co-operation
and Development. As transfer pricing has a cross-border effect, the focus of local tax authorities on
implemented transfer pricing procedures in a country may have an impact on results in another country. In
order to mitigate the transfer pricing uncertainties within our deployment, we have taken certain measures
and put in place a monitoring system.
Uncertainties can also result from disputes with local tax authorities about transfer pricing of internal
deliveries of goods and services or related to financing, acquisitions and divestments, the use of tax credits,
the use of permanent establishments, and losses carried forward. These uncertainties may have a
significant impact on local tax results. Deferred tax assets recorded in our statement of financial position
are A 7.1 million as of December 31, 2014. Tax assets can also result from the generation of tax losses in
certain legal entities. Tax authorities may disallow the use of these deferred tax assets.
The control and prevention mechanisms of our compliance structure may not have been, or may not be, sufficient to
adequately protect us from all legal or financial risks. Cases of irregularities could lead to official investigations or
third-party claims against us.
Prior to the Offering, we appointed a general counsel who serves as our compliance officer. We source
data protection services from Wacker Chemie AG. We also follow Wacker Chemie AG’s group-wide code
of conduct to protect us against legal risks and other potential harm. These binding policies address
law-abiding conduct, corruption prevention, conflicts of interest, information and data protection, diversity
and discrimination, sustainability and environmental protection, health and safety and protection of
company property. They apply to all employees, the members of the management board and the
supervisory board. Moreover, we have introduced a code of conduct for our major suppliers. Legal and
compliance risks are addressed by our risk management.
Although we believe that the aforementioned compliance arrangements will offer a degree of protection,
our general counsel is new to our company this year and these arrangements may not be sufficient to
completely eliminate all unauthorized practices, legal infringements or corruption within our Group. Any
failure in compliance could materially adversely affect our business, net assets, financial condition and
Labor disruptions could materially adversely affect our business, net assets, financial condition and results of
operations.
As of March 31, 2015, our Group had 4,103 employees worldwide. In Germany, we believe that
approximately half of our employees are unionized. While there have been no material work stoppages at
any of our facilities due to labor union activities in recent years, any stoppage or slowdown at any of these
facilities could cause material interruptions in manufacturing, and we cannot be certain that alternate
qualified capacity would be available on a timely basis or at all. As a result, labor disruptions at any of our
facilities could materially adversely affect our business, net assets, financial condition and results of
operations.
We have substantial pension and other employee benefits-related obligations. Changes in the yield assumptions used
with respect to our obligations, any legally required increases in our contributions to the pension fund covering our
employees or declines in the fair value of our pension plan assets could materially adversely affect our business, net
We are obligated to pay our German and U.S. employees certain benefits, including pension and
retirement payments and medical insurance (in particular in the U.S.) following the termination of their
employment. These benefit plans consist of both defined contribution and defined benefit plans and vary
based on the country in which we maintain them (Germany and the United States). The present value of
our defined benefit obligations has increased significantly over the past few years. As of March 31, 2015,
the total present value of our defined benefit obligations was A 880.0 million (December 31, 2014:
A 761.9 million; December 31, 2013: A 568.5 million), while our provision for pension and similar employee
benefits covering the unfunded status as of March 31, 2015 was A 428.5 million (which is the present value
of our defined benefit obligations less the fair value of plan assets totaling A 451.5 million as of March 31,
2015) (December 31, 2014: A 328.1 million; December 31, 2013: A 185.0 million).
15
The present value of our pension and other long-term employee benefits-related obligations is materially
affected by the discount rate used to measure pension obligations and the longevity and actuarial profile of
plan participants and other assumptions used to calculate the present value of our defined benefit
obligations. These assumptions relate to expectations of rates for benefit increases, retirement rates,
mortality rates, health care cost trends, interest rates, legal, accounting and regulatory developments,
requirements regarding the calculation of pensions owed and other factors. Any change in these
assumptions would affect the value of our pension and retirement obligations and the funding status of our
plans, and accordingly our pension costs and future cash contributions. A reduction of one half percentage
point in the discount rate would increase the present value of our pension obligations by A 80 million as of
December 31, 2014. Conversely, increasing the discount rate by one half percentage point would decrease
the present value of our pension obligations by A 70 million as of December 31, 2014. Any of the changes
described above could materially adversely affect our business, net assets, financial condition and results of
operations.
Our pension obligations for our German employees are partially financed through the Pensionskasse der
Wacker Chemie VVaG, a multi-employer pension fund supervised by the German Financial Supervisory
Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). We are required to make regular contributions
to the fund. Due to the financial crisis and ensuing low interest rate environment in recent years, the
German Financial Supervisory Authority has required the Pensionskasse der Wacker Chemie VVaG to
calculate its pension liabilities using a lower discount rate of four percent for the majority of its defined
benefit plans. This has, in turn, caused the Pensionskasse der Wacker Chemie VVaG to demand
significantly higher contributions (and we have made additional cash injections in some instances) from us
and its other members. In order to compensate the decreasing investment income of Pensionskasse der
Wacker Chemie VvaG until 2020, an increase of our contributions by A 0.5 million per year will be required
(assuming a return of two percent on new fixed income investments by Pensionskasse der Wacker Chemie
VvaG). Should the current low interest rate environment continue, we may be required to make further
increases in our contributions and additional cash injections to pension funds for our employees. These
additional payments are not currently reflected in our business plan and could materially adversely affect
our business, net assets, financial condition and results of operations. In addition, the Pension Guaranty
Benefit Corporation, a U.S. government agency, opened a routine investigation related to the levels of
funding in our Portland pensions following the closure of one of our Portland facilities and an inquiry
under the early warning program regarding the restructuring of the Wacker group as a result of the
Offering. The Pension Guaranty Benefit Corporation uses the early warning program to inquire about
proposed transactions (like the Offering) that may weaken the financial support for a pension plan (e.g.
where a subsidiary would no longer be part of a controlled group). We do not expect any adverse outcome
related to this. However, the investigation is still ongoing and we or the Wacker group could be required to
make additional contributions should a determination be made that these U.S. corporation-based pensions
are not adequately funded.
As of March 31, 2015, our pensions are fully funded under German generally accepted accounting
principles which use a seven year average to calculate required provisions. Interest rates have dropped
significantly in recent years. While under IFRS, changes in discount rates will increase reserves and reduce
other comprehensive income, under German generally accepted accounting principles, we record such
effects in our statement of profit or loss. If the interest rates for determining the funding level of our
pension obligations for purposes of our German statutory accounts do not increase, we will experience a
reduction in net income in future years attributable to the resulting increases in our pension obligations
based on the lower seven year average discount rates. Should we incur these or similar losses and if we are
not able to compensate for such reductions in net income (for example, through dividends from our
overseas subsidiaries), our retained earnings will be reduced and our ability to pay dividends (which is
based on results under our German statutory accounts) will be impaired.
In addition, the fair value of the assets available to fund our pension obligations is materially affected by
the actual and expected long-term rate of return on the plan assets. Changes and movements in the equity,
fixed income, real estate and other markets could significantly change the fair value of our plan assets. Any
significant decrease in the fair value of our pension plan assets could materially adversely affect our
16
Volatility in energy prices and factors impacting energy supply and prices, such as regulatory and tax decisions and
legislation, may materially adversely affect our business, net assets, financial condition and results of operations.
We require large quantities of energy for use in our production facilities, the most important of which are
electricity and steam. Overall, we spent A 63 million (including SSW) on energy in the year ended
December 31, 2014. Energy prices are generally volatile and tend to be influenced by factors relating to
oil-producing countries such as political or military conflicts.
Even though oil prices declined significantly in the last six months of 2014, the trend towards rising energy
prices (particularly for electricity) is expected to continue as global demand increases at a faster rate than
global supply. In addition, regulatory decisions, such as restrictions on nuclear power production and
governmental support measures for renewable energy, have led and may continue to lead to increases in
energy prices.
Further, we currently benefit from significant allowances in connection with renewable energy
apportionment (regarding electricity) in Germany. The German Renewable Energy Act (ErneuerbareEnergien-Gesetz, ‘‘EEG’’) generally apportions the costs of renewable energy investments to all end
consumers, private individuals and companies, depending on energy consumption. Under certain
conditions, the EEG surcharge can be limited for energy-intensive companies that are in an intense
international competitive environment. At present, we benefit at both our German production facilities in
Freiberg and Burghausen from limited EEG charges—the cost reduction amounted to A 16 million in 2013
and A 20 million in the year ended December 31, 2014, in aggregate for both sites in Germany. If we are no
longer able to benefit from the exemptions under the EEG (the EEG in its current version will be
re-assessed in 2017), we could be subject to significantly higher energy prices in the future.
In addition, since 2013, we benefit at our production site in Freiberg from a partial exemption for
companies that are electricity-intensive from paying grid charges, which amounted to approximately
A 1.3 million per year in 2013 and 2014. At our production site in Burghausen, we purchase our electricity
from Wacker Chemie AG, and Wacker Chemie AG passes on the grid charges payable by it proportionally
according to our use. In the years 2011-2013, Wacker Chemie AG was completely exempted from grid
charges, meaning no grid charges were passed on to us, and in 2014, Wacker Chemie AG was partly
exempted from grid charges and thus passed on to us a reduced grid charge only. The basis of exemption is
stipulated in the German Electricity Grid Access Charge Ordinance (Stromnetzentgeltverordnung,
‘‘StromNEV’’) which, since its amendment in 2013, no longer provides for the possibility of complete
exemptions but sets forth a system of staggered rebates for companies in electricity-intensive industry
sectors. We may continue to receive partial exemptions based on the amended StromNEV on an annual
basis, provided that we and Wacker Chemie AG meet certain preconditions (in particular a minimum of
annual operating hours (Jahresbenutzungsstunden)) in the respective year. If we, or Wacker Chemie AG,
were to no longer benefit from such exemptions, we could incur higher energy costs for electricity.
Furthermore, in early 2013, the European Commission started to investigate whether the complete
exemptions from grid charges granted in 2011 constitute illegal state aid. In case the European
Commission concludes that past exemptions from grid charges constituted illegal state aid, we might also
be required to make payments with regard to grid charges for previous periods. Wacker Chemie AG has
agreed not to retroactively charge us for any additional grid fees for our electricity consumption in
Burghausen for the years 2011 through 2014.
Any failure to pass on significantly higher energy costs to customers could materially adversely affect our
business, net assets, financial condition and results of operations. In addition, higher energy costs can
affect the prices of raw materials and transportation, which would increase our costs of goods sold and
selling expenses.
Regulatory decisions, and other events, such as natural disasters, may lead to temporary or permanent
energy supply shortages. The materialization of any of these risks could materially adversely affect our
B.
RISKS RELATING
TO THE
RELATIONSHIPS
WITH THE
CURRENT SHAREHOLDER
Wacker Chemie AG can exercise control over us and our business activities.
Immediately following the completion of this Offering assuming 4,411,765 New Shares are issued and sold,
Wacker Chemie AG will own (directly or indirectly) 19,000,000 shares, or 64.6 percent, of our outstanding
ordinary shares (or 17,438,236 shares, or 59.3 percent, if the Underwriters exercise in full their option to
purchase additional shares). Wacker Chemie AG’s percentage ownership (direct and indirect) of our
17
outstanding ordinary shares will be larger if the issuance and sale of a smaller number of New Shares is
sufficient to generate the targeted A 150 million gross proceeds for the Company. Following the completion
of the Offering, Wacker Chemie AG will (indirectly) possess sufficient voting power to approve resolutions
of our general shareholders meeting, which require a simple majority of votes, and will be able to do so
irrespective of how the other shareholders in attendance vote. Such simple-majority resolutions include,
for example, decisions concerning the election and removal of supervisory board members elected by the
shareholders and decisions concerning the payment of dividends. Under German corporate law, certain
corporate matters (such as creating authorized or contingent capital, amending the corporate purpose, as
well as undergoing mergers, spin-offs and a transformation into another legal form) require the consent of
at least three-quarters of the registered share capital represented at the meeting. If, at any general
shareholders meeting, at least three-quarters of the registered share capital in attendance is (directly or
indirectly) attributable to Wacker Chemie AG (because of the low attendance by the other shareholders),
then Wacker Chemie AG may exercise their (direct and indirect) voting power to adopt resolutions
requiring by law a qualified majority of the registered share capital represented at the meeting. Moreover,
Wacker Chemie AG could block the adoption of resolutions by the general shareholders meeting. In
particular, this blocking power exists in the case of resolutions, requiring a qualified majority of the
registered share capital represented at the meeting.
Conflicts of interest between Wacker Chemie AG and us could be resolved in a manner unfavorable to us.
Various conflicts of interest between Wacker Chemie AG and us could arise. Following the completion of
this Offering, Dr. Joachim Rauhut and Dr. Tobias Ohler of Wacker Chemie AG’s management board,
Sieglinde Feist of the Selling Shareholder’s management board and Harald Sikorski of Wacker Chemie
AG’s supervisory board will be a member of our supervisory board. In addition, certain members of our
supervisory board own shares or options to purchase shares in Wacker Chemie AG.
These relationships could create or appear to create potential conflicts of interest, in particular when those
officers or directors are faced with decisions that could have different implications for Wacker Chemie AG
and us. These decisions could, for example, relate to:
•
corporate opportunities, including the allocation of potential business opportunities that both we and
Wacker Chemie AG find attractive, and which would complement our respective businesses;
•
financing and dividend policy;
•
compensation and benefit programs and other human resources policy decisions;
•
termination of, changes to or determinations under the agreements between Wacker Chemie AG and
us; and
•
determinations with respect to our tax returns.
Potential conflicts of interest could also arise in connection with our existing service agreements, labor
support agreement and polysilicon supply agreements or if we enter into any new commercial
arrangements with Wacker Chemie AG in the future. Furthermore, Wacker Chemie AG may decide to sell
all or a portion of the ordinary shares that it holds in us to a third party, including to one of our
competitors, thereby giving that third party substantial influence over our business and our affairs. Such a
sale could be contrary to the interests of certain of our stakeholders, including our employees or our public
shareholders.
Although our company is a separate entity with its own management and supervisory boards, as long as
Wacker Chemie AG is our majority shareholder it may from time to time make strategic decisions that it
believes are in the best interests of its business as a whole, including our company. These decisions may be
different from the decisions that we would have made independently.
Wacker Chemie AG’s decisions with respect to us or our business may be resolved in ways that favor
Wacker Chemie AG and therefore Wacker Chemie AG’s own shareholders, which may not coincide with
the interests of our company’s other shareholders. We may not be able to resolve any potential conflicts
and, even if we do so, the resolution may be less favorable to us than if we were dealing with an unaffiliated
party.
18
We have previously reported as a business segment of Wacker Chemie AG. Therefore, our prospects must be
considered in light of the risks, expenses and difficulties encountered by companies in the early stages of fully
independent business operations, particularly companies in highly competitive markets such as ours.
In the past, we were a wholly-owned subsidiary and have reported as a business segment of Wacker Chemie
AG. In this context, our recent experience operating on a standalone basis and performing all corporate
functions independent of Wacker Chemie AG is limited. In addition, we were part of the Wacker group
cash pool system and until December 31, 2014, a profit and loss transfer agreement had been in effect
between Wacker-Chemie Dritte Venture GmbH and us, covering our net losses in recent years. If we were
required to enter into new financing arrangements in the future, the economic terms may prove to be less
favorable than our previous arrangements with the Wacker group, which may materially adversely affect
our business, net assets, financial condition and results of operations. Since we are becoming a public
company, our management team will also need to develop the expertise necessary to comply with the
numerous regulatory and other requirements applicable to independent public companies, including
requirements relating to corporate governance, listing standards and securities and investor relations
issues. Therefore, our prospects must be considered in light of the risks, expenses and difficulties
encountered by companies in the early stages of fully independent business operations, particularly
companies in highly competitive markets such as ours.
Wacker Chemie AG will provide us with a number of services pursuant to certain services agreements. When these
agreements terminate, we will need to replace the services, and the economic terms of the new arrangements may be
less favorable to us.
Wacker Chemie AG provides us with specified support services related to corporate functions such as site
services in Burghausen, engineering, material procurement, tax, legal, partially finance, accounting,
information technology, and human resources. Following the Offering, we will have to pay a slightly higher
service fee following the Offering as compared to the expenses we incurred in the past. Moreover, we are
part of the group-wide risk management system of Wacker Chemie AG. When the services agreements
terminate, we must either enter into new agreements with Wacker Chemie AG or another services
provider or assume the responsibility for these functions ourselves. The economic terms of the new
arrangements may be less favorable than the arrangement with Wacker Chemie AG under the current
services agreements and thereby materially adversely affect our business, net assets, financial condition and
results of operations. Due to the wide range of services provided by Wacker Chemie AG, in particular at
our Burghausen site, we are also exposed to concentration and counterparty risk with regard to Wacker
Chemie AG.
In addition, we may in the future purchase services from third parties and set up additional internal
administrative departments. There is a risk that the move towards greater independence in functions
involving administration, finance and other services will not succeed to the extent necessary. There is also a
risk we will not have at our disposal adequate risk management mechanisms, cash management
mechanisms or hedging mechanisms against foreign currency risks during this phase.
Each of these factors could materially adversely affect our business, net assets, financial condition and
We may experience increased costs resulting from a decrease in the purchasing power we have historically possessed
as a wholly-owned subsidiary of Wacker Chemie AG.
We have historically been able to take advantage of Wacker Chemie AG’s size and purchasing power in
procuring goods, financing, technology and services, including insurance, employee benefit support and
audit services. Following the Offering, we are a smaller and less diversified company than Wacker Chemie
AG. Although we anticipate that, since we are a majority-owned subsidiary of Wacker Chemie AG, we will
be able to continue to take advantage of many of these benefits, we cannot guarantee that this will
continue to be the case. As a separate, standalone company, we may be unable to obtain goods, technology
and services and financing at prices and on terms as favorable as those available to us prior to the Offering,
which could materially adversely affect our business, net assets, financial condition and results of
operations.
19
C.
RISKS ARISING
FROM THE
OFFERING
OF
SILTRONIC AG’S SHARES
Prior to this Offering, Siltronic AG’s ordinary shares were not publicly traded and there may not be a liquid trading
market for the shares following the Offering.
Prior to this Offering, Siltronic AG’s ordinary shares were not publicly traded. An active trading market for
Siltronic AG’s ordinary shares may neither develop nor be sustained following this Offering. If an active
trading market does not develop, investors may have difficulty selling their ordinary shares at an attractive
price, or at all. The price for Siltronic AG’s ordinary shares in this Offering will be determined by us and
the Selling Shareholder in an agreement with the Joint Global Coordinators following completion of
bookbuilding, and it may not be indicative of prices that will prevail in the open market following this
Offering. Consequently, investors may not be able to sell their ordinary shares at or above the initial public
offering price or at any other price or at the time that investors would like to sell. An inactive market may
also impair our ability to raise capital by selling Siltronic AG’s ordinary shares.
The price of Siltronic AG’s ordinary shares is likely to be very volatile.
Following the Offering, the price of Siltronic AG’s ordinary shares could be exposed to price volatility, in
particular, as a result of fluctuations in the actual or forecasted operating earnings, changes in earnings
forecasts or the failure to meet the expectations of securities analysts, investors’ evaluations of the success
and effects of the strategy described in this prospectus, general economic conditions and other factors.
Among the factors that could affect the price of Siltronic AG’s ordinary shares are the risk factors
described in this section and other factors, including:
•
the volatility of the prices for our products and therefore of our revenues;
•
changes in demand for, and supply of, our products;
•
changes in market valuations of companies in our industry in general;
•
variations in our operating results (actual or anticipated);
•
technological changes that hurt our competitive position;
•
manifestations of uninsured risks;
•
unfavorable developments in litigation, governmental investigations or administrative proceedings in
which we may be involved;
•
developments in the regulatory landscape in countries in which we operate;
•
strategic moves by us or our competitors including, for example, acquisitions, alliances or
restructurings;
•
failure or anticipated failure of our quarterly or annual operating results to meet market expectations;
•
changes in expectations as to our future financial performance, including financial estimates by
securities analysts;
•
reviews of the long-term values of our assets, which could lead to impairment charges that negatively
impact our earnings;
•
release/expiration of the lock-up agreement or other restrictions on transfer of our ordinary shares;
•
sales or anticipated sales of additional ordinary shares; and
•
general market conditions.
General fluctuations in share prices, and technology stocks in particular, could put pressure on the price of
Siltronic AG’s ordinary shares, without there being any necessarily fundamental reason related to our
business or our earnings prospects.
The sale of a significant number of Siltronic AG’s ordinary shares by the Wacker group following the Offering would
adversely affect the price of our ordinary shares.
Sales of substantial amounts of our ordinary shares in the public market after this Offering, or the
perception that these sales could occur, could adversely affect the price of our ordinary shares and could
impair our ability to raise capital through the sale of additional shares. We and our existing shareholders
have agreed with the Underwriters, subject to certain exceptions, not to dispose of or hedge any of our
20
ordinary shares or securities convertible into or exchangeable for ordinary shares during the period from
the date of this prospectus continuing through the date that is 180 days after the date of this prospectus
(subject to extension in certain circumstances).
If the Wacker group sells a controlling interest in Siltronic AG to a third party in a private transaction, investors
may not realize any change-of-control premium on their shares and we may become subject to the control of a
presently unknown third party.
Following this Offering, Wacker Chemie AG and our Selling Shareholder will have the ability, should they
choose to do so, to sell some or all of their Siltronic AG shares in a privately negotiated transaction, which,
if sufficient in size, could result in a change of control of our company. The ability of the Wacker group to
privately sell its shares in Siltronic AG, with no requirement for a concurrent offer to be made to acquire
all of our ordinary shares that will be publicly traded hereafter, could prevent investors from realizing any
change-of-control premium on their ordinary shares that may otherwise accrue to the Wacker group on its
private sale of our ordinary shares.
Additionally, if the Wacker group privately sells its significant equity interest in our company, we may
become subject to the control of a presently unknown third party. Such third party may have conflicts of
interest with those of other stockholders. In addition, if the Wacker group sells a controlling interest in our
company to a third party, our indebtedness may be subject to acceleration and our commercial agreements
and relationships could be impacted, all of which may adversely affect our ability to run our business as
described herein and may materially adversely affect our business, net assets, financial condition and
We intend to prioritize support of operations and planned investments over paying dividends in the near-term.
We reported net profit in an amount of A 1.9 million for the three months ended 31 March 2015, but net
losses of A 27.0 million for the year ended December 31, 2014, A 109.3 million in the year ended
December 31, 2013 and A 90.6 million in the year ended December 31, 2012 and recently paid a dividend in
2014 which exhausted our retained profit from prior years. We intend to focus on supporting our
operations and planned investments in our business prior to paying out any cash dividends on our ordinary
shares. Any determination to pay dividends in the future will be made on the basis of Siltronic AG’s
unconsolidated annual financial statements prepared under German GAAP and will need to be resolved
upon by the shareholder’s meeting upon the management board’s and supervisory board’s
recommendation. Any decision to distribute a dividend will depend upon our financial condition and
results of operations as well as any contractual restrictions applicable to us under any potential
indebtedness we may incur in the future), restrictions imposed on us by applicable law, tax considerations
and other factors. Any decision not to pay a dividend in the future may materially adversely affect the
market value of the shares.
Investors will incur immediate dilution as a result of this Offering.
Investors who purchase shares in this Offering will pay more for their ordinary shares than the book value
of their ordinary shares. As a result, they will incur immediate dilution of A 23.44 per ordinary share
(assuming 4,411,765 New Shares are placed at the mid-point of the Price Range (defined below)),
representing the difference between the initial public offering price of A 34.00 per ordinary share
(mid-point of the price range) and our book value per ordinary share as of March 31, 2014 after giving
effect to this Offering). Accordingly, should we be liquidated at our book value, Investors would not
receive the full amount of their investment.
Future capital measures could lead to dilution or a substantial reduction in the value of existing shareholders’
interests in our company.
We may require additional capital in the future to finance our business operations or to repay our debts.
Both the raising of additional equity through the issuance of new ordinary shares and the (potential)
exercise of conversion or option rights by holders of convertible bonds or bonds with warrants, which may
be issued in the future, may dilute shareholder interests. Upon completion of the Offering, our articles of
association will – subject to the registration of the increase of the authorized capital and a conditional
capital (corresponding to an authorization to issue convertible bonds and other equity-linked instruments)
expected to be resolved by a general shareholders’ meeting taking place after the publication of this
prospectus – presumably provide for the issuance of up to 50 percent of the then registered share capital as
21
authorized capital and up to A 50 million as conditional capital. We may issue these ordinary shares (or
convertible bonds) without any additional approval by the shareholders and under certain conditions, for
example in the event of a capital increase against contributions in kind, without reserving any pre-emptive
subscription rights to the existing shareholders. Because our decision to issue securities in any future
offering will depend on market conditions and other factors beyond our control, we cannot predict or
estimate the amount, timing or nature of future offerings. Thus, holders of ordinary shares bear the risk of
our future offerings reducing the market price of the shares and diluting their rights in our Group.
22
PART 2: GENERAL INFORMATION
A.
RESPONSIBILITY STATEMENT
Siltronic AG, with its registered office at Hanns-Seidel-Platz 4, 81737 Munich, Germany, registered with
the commercial register (Handelsregister) of the local court (Amtsgericht) of Munich, Germany, under the
number HRB 150884 (the ‘‘Company,’’ or ‘‘Siltronic AG’’), and, together with its consolidated subsidiaries,
‘‘we,’’ ‘‘us,’’ ‘‘our,’’ ‘‘our Group,’’ ‘‘the Group,’’ the ‘‘Siltronic Group,’’ together with Citigroup Global
Markets Limited, London, United Kingdom (‘‘Citi’’) and Credit Suisse Securities (Europe) Limited,
London, United Kingdom (‘‘Credit Suisse’’ and, together with Citi, the ‘‘Joint Global Coordinators’’ and
‘‘Joint
Bookrunners’’)
and
COMMERZBANK
Aktiengesellschaft,
Frankfurt,
Germany
(‘‘COMMERZBANK’’), UniCredit Bank AG, Munich, Germany (‘‘UniCredit Bank AG’’) and HSBC
Trinkaus & Burkhardt AG, Duesseldorf, Germany (‘‘HSBC Germany’’ and, together with
COMMERZBANK and UniCredit Bank AG, the ‘‘Co-Lead Managers’’ and, together with the Joint
Bookrunners, the ‘‘Underwriters’’) have assumed responsibility for the contents of this prospectus
pursuant to Section 5 para. 4 of the German Securities Prospectus Act (Wertpapierprospektgesetz), and
declare that the information contained in this prospectus is, to the best of their knowledge, correct and
contains no material omissions.
If any claims are asserted before a court of law based on the information contained in this prospectus, the
investor appearing as plaintiff may have to bear the costs of translating this prospectus prior to the
commencement of the court proceedings pursuant to the national legislation of the member states of the
European Economic Area (the ‘‘EEA’’).
B.
PURPOSE
OF THIS
PROSPECTUS
This prospectus relates to the offering of 12,650,000 ordinary registered shares of the Company with
no-par value (Stückaktien), each such share representing a notional value of A 4.00 and with full dividend
rights from January 1, 2015, (the ‘‘Offering’’) consisting of:
•
5,000,000 newly issued ordinary registered shares with no-par value (Stückaktien) (the ‘‘New Shares’’)
from a capital increase against contribution in cash expected to be resolved by an extraordinary
shareholders’ meeting of the Company on June 8, 2015, (the ‘‘IPO Capital Increase’’); and
•
6,000,000 ordinary registered shares with no-par value (Stückaktien) from the holdings of the Selling
Shareholder (the ‘‘Existing Shares’’ and, together with the New Shares, the ‘‘Base Shares’’); and
•
1,650,000 ordinary registered shares with no-par value (Stückaktien) from the holdings of the Selling
Shareholder in connection with a potential over-allotment (the ‘‘Over-Allotment Shares’’ and,
together with the Base Shares, the ‘‘Offer Shares’’).
This prospectus also relates to the admission to trading on the regulated market segment (regulierter Markt)
of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the
sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the
Frankfurt Stock Exchange of:
•
25,000,000 ordinary registered shares with no-par value (Stückaktien) (share capital prior to the IPO
Capital Increase); and
•
up to 5,000,000 newly issued ordinary registered shares with no-par value (Stückaktien) as per the IPO
Capital Increase.
The Offering consists of initial public offerings in the Federal Republic of Germany (‘‘Germany’’) and the
Grand Duchy of Luxembourg (‘‘Luxembourg’’) and private placements in certain jurisdictions outside
Germany and Luxembourg. In the United States of America (the ‘‘United States’’), the Offer Shares will
be offered and sold only to qualified institutional buyers (‘‘Qualified Institutional Buyers’’ or ‘‘QIBs’’) as
defined in Rule 144A under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’).
Outside the United States, the Offer Shares will be offered and sold only in offshore transactions in
reliance on Regulation S under the Securities Act (‘‘Regulation S’’).
C.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. A forward looking statement is any statement that
relates to facts or events after the date of this prospectus. These statements relate to analyses and other
information, which are based on forecasts of future results and estimates of amounts not yet determinable.
23
These statements also relate to our future prospects, developments and business strategies. Statements
made using words such as ‘‘intends,’’ ‘‘predicts,’’ ‘‘forecasts,’’ ‘‘plans’’ or ‘‘expects’’ may be an indication of
forward-looking statements. Forward-looking statements are contained in many sections of this prospectus,
including those entitled ‘‘Prospectus Summary,’’ ‘‘Part 1: Risk Factors,’’ ‘‘Part 10: Management’s Discussion
and Analysis of Financial Condition and Results of Operations—B. Factors Affecting the Comparability of Our
Results—Our Relationship with the Wacker group,’’ ‘‘Part 10: Management’s Discussion and Analysis of
Financial Condition and Results of Operations—C. Key Factors Affecting Our Results of Operations and
Financial Condition,’’ ‘‘Part 11: Markets and Competition,’’ ‘‘Part 12: Business’’ and ‘‘Part 23: Recent
Developments and Outlook.’’ Although we believe that our plans, intentions and expectations reflected in or
suggested by such forward-looking statements are based on reasonable assumptions, we may not achieve
those plans, intentions or expectations. All forward-looking statements are subject to numerous factors,
risks and uncertainties that may cause actual results to differ materially from those that we expected.
Important factors that could cause actual results to differ materially from our expectations, or cautionary
statements, are disclosed under the sections entitled ‘‘Part 1: Risk Factors’’ and ‘‘Part 12: Management’s
Discussion and Analysis of Financial Condition and Results of Operations’’ and elsewhere in this prospectus.
All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified
in their entirety by the cautionary statements contained in this prospectus under the heading ‘‘Part 1: Risk
Factors.’’ You should evaluate all forward-looking statements made in this prospectus in the context of
these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are
important to you. In addition, we cannot assure you that we will realize the results or developments we
expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us
or our operations in the way we expect. The forward-looking statements included in this prospectus are
made only as of the date hereof. We undertake no obligation to publicly update or revise any forwardlooking statement as a result of new information, future events or otherwise, except as otherwise required
by law. Nevertheless, we have the obligation to disclose any significant new event or significant error or
inaccuracy relating to the information contained in this prospectus that may affect an assessment of the
securities and occurs or comes to light following the approval of this prospectus, but before the completion
of the public offering or the admission of the securities to trading, whichever is later. These updates must
be disclosed in a prospectus supplement in accordance with Section 16 (1) sentence 1 of the German
Securities Prospectus Act (Wertpapierprospektgesetz).
D.
INDUSTRY
AND
MARKET DATA
We obtained the market and industry data and other statistical information used throughout this
prospectus from our own research, surveys or studies conducted by third parties, independent industry or
general publications and other published independent sources. In particular, we have based much of our
discussion concerning the industry and market in which we operate on independent data, research opinions
and viewpoints published by Gartner, an information technology research and advisory firm providing
technology related insight. The statements from Gartner speak only of the date on which they were
originally published by Gartner and not the date of this Prospectus, are not statements of fact and are
subject to change. We have based certain statements with respect to demand for semiconductors and
semiconductor applications on information from SEMI Silicon Manufacturers Group, a trade association
serving the manufacturing supply chains for the microelectronics and photovoltaic industries, as well as
Semiconductor Industry Association, a trade association serving the U.S. semiconductor industry. Industry
publications and surveys generally state that they have obtained information from sources believed to be
reliable, but do not guarantee the accuracy and completeness of such information. Prospective investors
are advised to consider this third-party information carefully since market studies could be based on
information or assumptions that may be inaccurate or inappropriate, and their methodology is inherently
predictive and speculative. We have accurately reproduced such information and, as far as we are aware
and able to ascertain from information published by such third parties, no facts have been omitted that
would render the reproduced information inaccurate or misleading. While we believe that each of these
sources is reliable and have accurately reproduced this information in a way we believe not to be
misleading, we have not independently verified such data, and we make no representations as to the
accuracy of such information. Similarly, we believe our internal research is reliable, but it has not been
verified by any independent sources.
24
E.
DOCUMENTS AVAILABLE
FOR INSPECTION
For the period during which this prospectus is valid, the following documents will be available for
inspection during regular business hours at the Company’s offices at Hanns-Seidel-Platz 4, 81737 Munich,
Germany:
•
our articles of association;
•
our unaudited consolidated financial statements prepared in accordance with IFRS (defined below) as
of and for the three months ended March 31, 2015;
•
our audited consolidated financial statements prepared in accordance with IFRS (defined below) as of
and for the fiscal years ended December 31, 2014, December 31, 2013 and December 31, 2012;
•
the Company’s audited financial statements prepared in accordance with the German Commercial
Code (Handelsgesetzbuch) as of and for the fiscal year ended December 31, 2014; and
•
SSW’s audited unconsolidated financial statements prepared in accordance with IFRS (defined
below) as of and for the fiscal years ended December 31, 2013 and December 31, 2012.
The annual financial statements of the Company are also published in the German Federal Gazette
(Bundesanzeiger).
Following their publication, the Company’s future consolidated annual and interim financial statements
will be available from the Company under the ‘‘financial reports’’ link on the investor relations portion of
its website at www.siltronic.com/int/en/ investor_relations/ and from the paying agent designated in this
prospectus (see ‘‘Part 17: General Information on Siltronic AG and Our Group—H. Announcements, Paying
Agent’’).
F.
PRESENTATION
OF
FINANCIAL
AND
OTHER INFORMATION
In this prospectus, references to ‘‘Euro,’’ ‘‘A’’ and ‘‘EUR’’ are to the single currency adopted by
participating member states of the European Union relating to Economic and Monetary Union, references
to ‘‘U.S. Dollars,’’ ‘‘$,’’ ‘‘USD’’ and ‘‘US$’’ are to the lawful currency of the United States of America,
references to ‘‘Singapore Dollars,’’ ‘‘SGD’’ and ‘‘SG$’’ are to the lawful currency of Singapore and
references to ‘‘Japanese Yen’’ or ‘‘JPY’’ are to the lawful currency of Japan.
We present our consolidated financial statements in Euro, and we must translate the assets, liabilities, sales
and expenses of a substantial portion of our foreign operations into Euro at applicable exchange rates,
subjecting us to translation risk. The exchange rates we used in preparing our consolidated statement of
financial position which includes our assets and liabilities in U.S. Dollars per A 1.00 as of December 31,
2012, 2013 and 2014 were $ 1.3196, $ 1.3770 and $ 1.2155. The exchange rates we used in preparing our
consolidated statement of profit or loss in U.S. Dollars per A 1.00 for the years ended December 31, 2012,
2013 and 2014 were $ 1.2850, $ 1.3278 and $ 1.3269. See ‘‘Currencies and Exchange Rates.’’ Consequently,
increases or decreases in the value of the Euro may affect the value of these items with respect to our
non-Euro businesses in our consolidated financial statements, even if their value has not changed in their
local currency. For example, a stronger Euro will reduce the relative value of reported results of non-Euro
operations and, conversely, a weaker Euro will increase the relative value of the non-Euro operations.
These translations could significantly affect the comparability of our results between financial periods or
result in significant changes to the carrying value of our assets, liabilities and equity. For more information
on transaction and currency translation risks and our efforts to manage them, please see ‘‘Part 1: Risk
Factors—A. Risks Relating to Our Business—Exchange rate fluctuations could significantly negatively affect
our earnings and cash flow.’’
Rounding
All of the financial data presented in the text and tables in this prospectus are shown in millions of Euro
(in A million), except as otherwise stated. Certain financial data (including percentages) in the tables in this
prospectus have been rounded according to established commercial standards. As a result, the aggregate
amounts (sum totals or sub-totals or differences or if numbers are put in relation to each other) in those
tables may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures
appearing elsewhere in this prospectus. Furthermore, in those tables, these rounded figures may not add
up exactly to the totals contained in those tables. Financial information presented in parentheses in tables
denotes the negative of such number presented. In respect of financial data set out in this prospectus, a
25
dash (‘‘—’’) signifies that the relevant figure is not available, while a zero (‘‘0.0’’) signifies that the relevant
figure is available but has been rounded to zero.
Financial Statements
The audited consolidated financial statements for Siltronic AG included in this prospectus were prepared
in accordance with the International Financial Reporting Standards as issued by the International
Accounting Standards Board (‘‘IASB’’) as adopted by the European Union (‘‘IFRS’’). The audited
unconsolidated financial statements for the Company included in this prospectus were prepared in
accordance with the German Commercial Code (Handelsgesetzbuch).
Our financial year ends on December 31. References to any financial year refer to the year ended
December 31 of the calendar year specified.
Where financial data in this prospectus is labeled ‘‘audited,’’ this means that it has been taken from our
audited financial statements (please see ‘‘Part 9: Selected Consolidated Financial Data’’ for more
information on which financial statements have been audited and by whom). The label ‘‘unaudited’’ is used
in this prospectus to indicate financial data that has not been taken from audited financial statements, but
was taken either from our unaudited condensed interim financial statements or our internal reporting
system, or is based on calculations of these figures.
Non-IFRS Financial Measures
In this prospectus, we present certain financial measures that are not recognized by IFRS and that may not
be permitted to appear on the face of IFRS-compliant financial statements or notes thereto.
The non-IFRS financial measures used in this prospectus are Adjusted Sales, Adjusted EBITDA, adjusted
net cash flow and adjusted capital expenditures. We present these measures in adjusted form for periods
prior to January 24, 2014 to include the results of our subsidiary SSW, to approximate our results as if SSW
had been consolidated throughout the periods under review. We started consolidating SSW as of
January 24, 2014 on the basis of an agreement under which we agreed to increase our interest in SSW from
50 percent to 78 percent and take over operational control of SSW. We define Adjusted Sales to include
SSW’s sales that were made to third parties. We purchase many of SSW’s wafers, and these sales are
considered intra-group sales and are eliminated once SSW is consolidated. Because simply adding SSW’s
sales to our Group’s reported sales in previous years would double-count these intra-group sales, we use
Adjusted Sales to better understand the changes in our sales prior to consolidating SSW. We define
Adjusted EBITDA as earnings before financial result, income tax expense, depreciation, amortization and
impairment, restructuring expenses and acquisition-related effects of SSW (restructuring expenses and
acquisition-related effects are only adjusted if exceeding A 5.0 million each). We believe that Adjusted
EBITDA is a useful profitability measure used by our management to evaluate our operating performance
and make decisions regarding allocation of capital. We define Adjusted Net Cash Flow as the sum of cash
flow generated by/(used in) operating activities and investing activities of our Group, adjusted for (i) cash
flow from/(used in) operating and investing activities of SSW before February, 2014, (ii) the acquisition of
SSW (net of cash acquired) and (iii) payments for loans of the Group in SSW and taking into account
(iv) changes in prepayments from customers which can be a positive or negative value (calculated as the
year-on-year change in the difference between the total prepayments that we receive in a fiscal year and
total prepayments refunded during the same year). We define Adjusted Capital Expenditures as additions
to property, plant and equipment.
Different companies and analysts may calculate measures based on EBIT, EBITDA, Adjusted EBITDA,
contribution margins, cash flows, capital expenditure and working capital differently, so making
comparisons among companies on this basis should be done carefully. Adjusted Sales, Adjusted EBITDA,
Adjusted Net Cash Flow and Adjusted Capital Expenditures are not measures of performance under IFRS
and should not be considered in isolation or construed as substitutes for revenue or sales, consolidated
profit/(loss) for the period, operating result, earnings before interest and taxes (EBIT), gross profit and
other IFRS measures as an indicator of our operations in accordance with IFRS.
Reconciliation of Non-IFRS Financial Measures
The non-IFRS financial measures contained in this prospectus are unaudited and have not been prepared
in accordance with IFRS or the accounting standards of any other jurisdiction and may not be comparable
to other similarly titled measures of other companies. For a reconciliation of these non-IFRS financial
26
measures to the most directly comparable IFRS measures, see ‘‘Part 9: Selected Consolidated Financial
Data—B. Additional Financial Information and Key Performance Indicators.’’
Other Information
This prospectus contains inactive textual addresses of Internet websites operated by us and third parties.
Reference to such websites is made for informational purposes only, and information found at such
websites is not incorporated by reference into this prospectus.
G.
CURRENCIES
AND
EXCHANGE RATES
Our reporting currency is the Euro. We have a large subsidiary in the United States and the majority of our
sales are priced in U.S. Dollars. Fluctuations in the exchange rate between the Euro and the U.S. Dollar
will affect our sales and other items for which the U.S. Dollar is the reference currency. The following
tables set forth, for the periods and dates indicated, the period end, average, high and low exchange rates
in U.S. Dollars per A 1.00.
Exchange Rates for the Previous Six Months
November 2014 . . . . . .
December 2014 . . . . . .
January 2015 . . . . . . . .
February 2015 . . . . . . .
March 2015 . . . . . . . .
April 2015 . . . . . . . . .
May 1 through May 22,
....
....
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....
....
....
2015
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Period
End
Average
Rate(1)
High
Low
1.2438
1.2101
1.1290
1.1197
1.0741
1.1162
$ 1.1033
1.2473
1.2329
1.1594
1.1350
1.0819
1.0822
1.1230
1.2554
1.2504
1.1936
1.1462
1.1212
1.1174
1.1428
1.2394
1.2101
1.1279
1.1197
1.0524
1.0582
1.1033
Period
End
Average
Rate
High
Low
1.3269
1.2973
1.3186
1.3779
1.2101
1.3261
1.4002
1.2909
1.3303
1.3210
1.4536
1.4875
1.3463
1.3816
1.3870
1.1959
1.2926
1.2062
1.2774
1.2101
Exchange Rates for the Five Years ended December 31, 2014(2)
2010
2011
2012
2013
2014
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(1)
The average of the daily exchange rates during the relevant period.
(2)
The average, high and low rates are determined on the basis of the month-end rates in the relevant period.
The Euro foreign exchange reference rate used in these tables is the noon buying rate in New York City for
cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New
York. On May 22, 2015 this rate was $ 1.1033 per A 1.00. These exchange rates may differ from the
exchange rate in effect on and as of the date of this prospectus.
In preparing our consolidated statement of profit or loss included within our financial statements, we have
used the following exchange rates:
January 1 to December 31,
2014
2013
2012
U.S. Dollars per A1.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
1.3269
1.3278
1.2850
The following table shows the exchange rates of the Singapore Dollar to the Euro which were used for
preparing our consolidated financial statements or other financial information presented in this
prospectus:
January
2014
Singapore Dollar per A1.00, average rates . . . . . . . . . . . . . . . . .
1.7346
As of
January 31,
2014
Singapore Dollar per A1.00, spot rates . . . . . . . . . . . . . . . . . . .
H.
ENFORCEMENT
OF
1.7290
January 1 to December 31,
2014
2013
2012
1.6816
1.6611
1.6055
As of December 31,
2013
2012
2011
1.7416
1.6120
1.6797
CIVIL LIABILITIES
The Company is a stock corporation (Aktiengesellschaft) governed by German law, but a portion of its
assets are located in the United States and Singapore. In addition, the members of the management board
(Vorstand) (the ‘‘Management Board’’) and the supervisory board (Aufsichtsrat) (the ‘‘Supervisory Board’’)
are non-residents of the United States and all or most of their assets are located outside the United States.
As a result, it may not be possible for investors from the United States to effect service of process within
the United States upon the Company or such persons or to enforce against them or the Company
judgments of courts of the United States, whether or not predicated upon the civil liability provisions of
the federal securities laws of the United States or other laws of the United States or any state thereof. The
United States and Germany do not currently have a treaty providing for reciprocal recognition and
enforcement of judgments in civil and commercial matters. Therefore, a final judgment for payment of
money rendered by a federal or state court in the United States based on civil liability, whether or not
predicated solely upon U.S. federal securities laws, may not be enforceable, either in whole or in part, in
Germany. However, if the party in whose favor such final judgment is rendered brings a new suit in a
competent court in Germany, such party may submit to the German court the final judgment rendered in
the United States. Under such circumstances, a German court will regard a judgment by a federal or state
court of the United States against the Company or such persons only as evidence of the outcome of the
dispute to which such judgment relates, and it may choose to re-hear the dispute. In addition, awards of
punitive damages in actions brought in the United States or elsewhere may be unenforceable in Germany.
28
PART 3: THE OFFERING
A.
SUBJECT MATTER
OF THE
OFFERING
This prospectus relates to the offering of 12,650,000 ordinary registered shares of the Company with
no-par value (Stückaktien), each such share representing a notional value of A4.00 and with full dividend
rights from January 1, 2015, consisting of:
•
5,000,000 New Shares;
•
6,000,000 Existing Shares; and
•
1,650,000 Over-Allotment Shares.
The Offering consists of initial public offerings in Germany and Luxembourg and private placements in
certain jurisdictions outside Germany and Luxembourg. In the United States, the Offer Shares will be
offered and sold only to QIBs as defined in Rule 144A. Outside the United States, the Offer Shares will be
offered and sold only in offshore transactions in reliance on Regulation S.
The share capital of the Company represented by the offering of 5,000,000 New Shares, the 6,000,000
Existing Shares and 1,650,000 Over-Allotment Shares totals A 50,600,000. Thus, approximately 42.2 percent
of the Company’s shares (after effectuation of the issuance of the maximum number of New Shares) will
be offered (approximately 36.7 percent without the 1,650,000 Over-Allotment Shares). Assuming issuance
of 4,411,765 New Shares at the mid-point of the Price Range, approximately 40.7 percent of the Company’s
shares will be allocated (approximately 35.4 percent without 1,561,764 Over-Allotment Shares).
Immediately prior to the Offering, all of the Company’s share capital was held by our existing shareholders
(see ‘‘Part 14: Security Ownership’’). Following completion of the Offering and assuming placement of
6,000,000 Existing Shares, 1,561,765 Over-Allotment Shares and 4,411,765 New Shares (resulting in gross
proceeds for the Company of approximately A 150 million at the mid-point of the Price Range (as defined
below)), our existing shareholders will continue to hold approximately 59.3 percent of the Company’s share
capital. We intend to issue up to 5,000,000 New Shares to achieve gross proceeds of approximately
A 150 million. This is equal to 5,000,000, 4,411,765 and 3,947,368 New Shares at the lower end, mid-point
and upper end of the Price Range (defined below), respectively. Assuming the placement of 5,000,000 New
Shares and 3,947,368 New Shares, respectively (resulting in gross proceeds for the Company of
approximately A 150 million at the lower end and the upper end, respectively, of the Price Range, and
assuming the placement of the Existing Shares and sale of 1,650,000 Over-Allotment Shares at the low end
and 1,492,105 Over-Allotment Shares at the upper end of the Price Range, respectively, our existing
shareholders will continue to hold approximately 57.8 percent and 60.5 percent of the Company’s share
capital. The Company will receive the proceeds of the Offering resulting from the sale of the New Shares
after deduction of fees and commissions. The Selling Shareholder will receive the proceeds of the Offering
resulting from the sale of the Existing Shares and, if and to the extent the Greenshoe Option (defined
below) is exercised, from the sale of the Over-Allotment Shares, in each case after deduction of fees and
commissions.
The Underwriters are acting in the following capacities: Citi and Credit Suisse are acting as the Joint
Global Coordinators and Joint Bookrunners, and COMMERZBANK, UniCredit Bank AG and HSBC
Germany are acting as Co-Lead Managers.
B.
PRICE RANGE, OFFER PERIOD, OFFER PRICE
AND
ALLOTMENT
The price range set for the Offering (the ‘‘Price Range’’) within which purchase orders may be placed is
A 30.00 to A 38.00 per Offer Share.
The period during which investors may submit purchase orders for the Offer Shares is expected to begin on
June 1, 2015, and is expected to end on June 10, 2015 (the ‘‘Offer Period’’). On the last day of the Offer
Period, offers to purchase may be submitted (i) until 12:00 noon (Central European Summer Time)
(‘‘CEST’’) by private investors and (ii) until 14:00 (CEST) by institutional investors. Purchase orders must
be for at least 10 shares and be expressed in full Euro amounts or increments of 25, 50 or 75 Euro cents.
Multiple purchase orders are permitted.
Subject to the publication of a supplement to this prospectus, if required, the Company and the Joint
Bookrunners reserve the right to increase or decrease the total number of Offer Shares, to increase or
decrease the upper limit and/or the lower limit of the Price Range and/or to extend or shorten the Offer
Period. Changes in the number of Offer Shares, changes to the Price Range or the extension or shortening
29
of the Offer Period will not invalidate any offers to purchase that have already been submitted. If such
change requires the publication of a supplement to this prospectus, investors who submitted purchase
orders before the supplement is published have the right, under the German Securities Prospectus Act
(Wertpapierprospektgesetz), to withdraw these offers to purchase within two business days of the publication
of the supplement. Instead of withdrawing the offers to purchase placed prior to the publication of the
supplement, investors may change their orders or place new limited or unlimited offers to purchase within
two business days of the publication of the supplement. To the extent that the terms of the Offering are
changed, such change will be published by means of electronic media (such as Reuters or Bloomberg) and,
if required by the German Securities Trading Act (Wertpapierhandelsgesetz) or the German Securities
Prospectus Act (Wertpapierprospektgesetz), as an ad hoc release via an electronic information dissemination
system, on the Company’s website and as a supplement to this prospectus. In such case, investors who have
submitted offers to purchase will not be notified individually. Under certain conditions, the Joint Global
Coordinators, on behalf of the Underwriters, may terminate the underwriting agreement, even after
commencement of trading (Aufnahme des Handels) of the Company’s shares on the regulated market
segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). See ‘‘Part 20:
Underwriting.’’
The placement price (the ‘‘Offer Price’’) and the final number of Offer Shares placed in the Offering will
be set jointly by the Company and the Joint Bookrunners. The price will be set on the basis of the purchase
orders submitted by investors during the Offer Period that have been collated in the order book prepared
during a bookbuilding process. These orders will be evaluated according to the prices offered and the
investment horizons of the respective investors. This method of setting the number of shares that will be
placed at the Offer Price is, in principle, aimed at maximizing proceeds. Consideration will also be given to
whether the Offer Price and the number of shares to be placed allow for the reasonable expectation that
the share price will demonstrate steady performance in the secondary market given the demand for the
Company’s shares as reflected in the order book. Attention will be paid not only to the prices offered by
investors and the number of investors wanting shares at a particular price, but also to the composition of
the group of shareholders in the Company that would result at a given price, and expected investor
behavior. The Company will not specifically charge any expenses and taxes related to the Offering to
investors.
The Offer Price and the final number of Offer Shares placed in the Offering (i.e., the result of the
Offering) are expected to be set on June 10, 2015. After the Offer Price has been set, the Offer Shares will
be allotted to investors on the basis of the offers to purchase then available. The Offer Price and the final
number of Offer Shares (that is, the result of the Offering) are expected to be published on or about
June 10, 2015 by means of an ad hoc release on an electronic information dissemination system and on the
Company’s website. Investors who have placed orders to purchase Offer Shares with one of the
Underwriters can obtain information from that Underwriter about the Offer Price and the number of
Offer Shares allotted to them on the business day following the setting of the Offer Price. As
commencement of trading (Aufnahme des Handels) of the Company’s shares on the regulated market
segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) is expected to
take place on the business day following the setting of the Offer Price, investors may not have obtained
information about the number of Offer Shares allotted to them at the time of commencement of trading.
Book-entry delivery of the allotted Offer Shares against payment of the Offer Price is expected to take
place two business days after commencement of stock exchange trading. Should the placement volume
prove insufficient to satisfy all orders placed at the placement price, the Underwriters reserve the right to
reject orders, or to accept them in part only.
EXPECTED TIMETABLE FOR THE OFFERING
The following is the expected timetable of the Offering, which may be extended or shortened:
May 29, 2015 . . . . . . . . . . . . . . . . . .
Approval of this prospectus by the German Federal Financial
Supervisory
Authority
(Bundesanstalt
für
Finanzdienstleistungsaufsicht, ‘‘BaFin’’)
Notification of the approved Prospectus to the Luxembourg
Commission for the Supervision of the Financial Sector
(Commission de Surveillance du Secteur Financier) (‘‘CSSF’’)
30
Publication of the approved prospectus on the Company’s
website (www.siltronic.com).
June 1, 2015 . . . . . . . . . . . . . . . . . . .
Commencement of marketing (roadshow)
Commencement of the Offer Period
Application for admission of the Company’s shares to trading on
the regulated market segment (regulierter Markt) of the
Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and,
simultaneously, to the sub-segment thereof with additional
post-admission obligations (Prime Standard)
June 10, 2015 . . . . . . . . . . . . . . . . . .
Admission decision to be issued by the Frankfurt Stock
Exchange (Frankfurter Wertpapierbörse)
Close of the Offer Period
Determination of the Offer Price and final number of shares
allocated; publication of the Offer Price in the form of an ad hoc
announcement on an electronic information system and on the
Company’s website
June 11, 2015 . . . . . . . . . . . . . . . . . .
Commencement of trading in the Company’s shares on the
Frankfurt Stock Exchange (Frankfurter Wertpapierbörse)
June 15, 2015 . . . . . . . . . . . . . . . . . .
Book-entry delivery of the Offer Shares against payment of the
Offer Price (settlement and closing)
C.
INFORMATION
ON THE
SHARES
Current and Future Share Capital; Form of the Shares
As of the date of this prospectus, the share capital of the Company amounts to A 100,000,000 and is divided
into 25,000,000 ordinary registered shares with no-par value (Stückaktien).
In connection with and for the purposes of the Offering, it is expected that the Company will issue such
number of New Shares as will result in gross proceeds of at least A 150 million. This is equal to 5,000,000,
4,411,765 and 3,947,368 New Shares at the lower end, mid-point and upper end, respectively, of the Price
Range. The exact number of shares will be resolved upon by an extraordinary shareholders’ meeting on
June 8th, 2015, prior to the determination of the Offer Price. Although the Company will use its best
judgment to resolve on the issuance of such number of shares as will result in gross proceeds of
A 150 million, because the Offer Price is unknown at the time of the IPO Capital Increase, it is possible
that the actual gross proceeds for the Company could be significantly above or below A 150 million. Upon
registration of the IPO Capital Increase with the commercial register, the Company’s outstanding share
capital will amount to up to A 120,000,000 (A 117,647,060 assuming the issuance of 4,411,765 New Shares)
and be divided into up to 30,000,000 ordinary registered shares (29,411,765 ordinary registered shares
assuming the issuance of 4,411,765 New Shares) with no-par value (Stückaktien). All Company’s shares will
be fully paid up.
Certification of the Shares
As of the date of this prospectus, all of the Company’s shares are ordinary registered shares
(Namensaktien) with no-par value (Stückaktien). The Company’s existing shares and the New Shares will
each be represented by a global share certificate (together the ‘‘Global Share Certificate’’), which will be
deposited with Clearstream Banking Aktiengesellschaft, Mergenthalerallee 61, 65760 Eschborn, Germany.
Section 4 paragraph 4 of our articles of association excludes, to the extent legally permissible and not
required by the rules and procedures of a stock exchange on which the Company’s shares are admitted for
trading, the right of the shareholders to receive share certificates. Our Management Board determines
pursuant to Section 4 paragraph 3 of our articles of association the form of the share certificates. The
Offer Shares provide holders thereof with the same rights as all of the other shares of the Company and do
not provide any additional rights or advantages.
31
D.
VOTING RIGHTS
Each share carries one vote at a general shareholders’ meeting (the ‘‘General Shareholders Meeting’’).
There are no restrictions on voting rights.
E.
DIVIDEND
AND
LIQUIDATION RIGHTS
The Offer Shares carry full dividend rights from January 1, 2015. In the event of the Company’s
liquidation, any proceeds will be distributed to the holders of the Company’s shares in proportion to their
interest in the Company’s share capital.
Apart from liquidation as a result of insolvency proceedings, we may be liquidated only with a vote of the
holders of at least three-quarters of the share capital represented at the shareholders’ meeting at which
such a vote is taken. If we are liquidated, any liquidation proceeds remaining after all of our liabilities have
been paid off would be distributed among our shareholders in proportion to their holdings in accordance
with German statutory law. The German Stock Corporation Act (Aktiengesetz) provides certain protections
for creditors which must be observed in the event of liquidation.
F.
DELIVERY
AND
SETTLEMENT
The delivery of the Offer Shares against payment of the Offer Price is expected to take place on June 15,
2015. The Offer Shares will be made available to the shareholders as co-ownership interests in the Global
Share Certificate.
At the shareholder’s option, the Offer Shares purchased in the Offering will be credited either to a
securities deposit account maintained by a German bank with Clearstream Banking AG or to a securities
account of a participant in Euroclear Bank S.A./N.V., 1, Boulevard Roi Albert II, 1120 Brussels, Belgium
(‘‘Euroclear’’), as the operator of the Euroclear system, or to Clearstream Banking S.A., 42 Avenue
JF Kennedy, 1855 Luxembourg, Luxembourg for the account of such shareholder.
G.
ISIN/WKN/COMMON CODE/TICKER SYMBOL
International Securities Identification Number (ISIN) . . . .
German Securities Code (Wertpapierkennnummer, WKN)
Common Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H.
TRANSFERABILITY
OF THE
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DE000WAF3001
WAF300
122354644
WAF
SHARES; LOCK-UP
The Company’s shares are freely transferable in accordance with the legal requirements for ordinary
registered shares. Except for the restrictions set forth in ‘‘—L. Lock-up Agreement, Limitations on
Disposal’’ and ‘‘Part 20: Underwriting—Selling Restrictions,’’ there are no prohibitions on disposals or
restrictions with respect to the transferability of the Company’s shares.
I.
INFORMATION
ON
EXISTING SHAREHOLDERS
Immediately prior to the Offering, our existing shareholders hold 100 percent of the Company’s
outstanding share capital. It is expected that our existing shareholders will continue to hold approximately
59.3 percent of the Company’s outstanding share capital upon completion of the Offering (assuming
issuance of 4,411,765 New Shares (resulting in gross proceeds for the Company of approximately
A 150 million at the mid-point of the Price Range) and the sale of 6,000,000 existing Shares and 1,561,764
Over-Allotment Shares). For further details on the ownership structure of the Company, see ‘‘Part 14:
Security Ownership.’’
J.
ALLOTMENT CRITERIA
The allotment of Offer Shares to private investors and institutional investors will be decided by the
Company after consultation with the Joint Bookrunners. The decision ultimately rests with the Company.
Allotments will be made on the basis of the quality of the individual investors and individual orders and
other important allotment criteria to be determined by the Company after consultation with the Joint
Bookrunners. The allocation to private investors will be compatible with the ‘‘Principles for the Allotment
of Share Issues to Private Investors’’ published by the Commission of Stock Exchange Experts
(Börsensachverständigenkommission). ‘‘Qualified Investors’’ (qualifizierte Anleger) under the German
32
Securities Prospectus Act, as well as ‘‘professional clients’’ (professionelle Kunden) and ‘‘suitable
counterparties’’ (geeignete Gegenparteien) as defined under the German Securities Trading Act
(Wertpapierhandelsgesetz), are not viewed as ‘‘private investors’’ within the meaning of the allocation rules.
As part of the Offering, the members of the Management Board will be preferentially allocated Offer
Shares purchased at the Offer Price in an aggregate amount of A 102,000.
K.
STABILIZATION
MEASURES,
OVER-ALLOTMENTS
AND
GREENSHOE OPTION
In connection with the placement of the Offer Shares, Citigroup Global Markets Limited, London, United
Kingdom, acting for the account of the Underwriters, will act as the stabilization manager (the
‘‘Stabilization Manager’’) and may, as Stabilization Manager, and acting in accordance with legal
requirements (Section 20a para. 3 of the German Securities Trading Act (Wertpapierhandelsgesetz) in
conjunction with Commission Regulation (EC) No. 2273/2003 of December 22, 2003), make
over-allotments and take stabilization measures to support the market price of the Company’s shares and
thereby counteract any selling pressure.
The Stabilization Manager is under no obligation to take any stabilization measures. Therefore, no
assurance can be provided that any stabilization measures will be taken. Where stabilization measures are
taken, these may be terminated at any time without notice. Such measures may be taken from the date the
Company’s shares are listed on the regulated market on the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) and must be terminated no later than the thirtieth calendar day after the first day of
trading of the shares (the ‘‘Stabilization Period’’).
These measures may result in the market price of the Company’s shares being higher than would otherwise
have been the case. Moreover, the market price may temporarily be at an unsustainable level.
Under the possible stabilization measures, investors may, in addition to the Base Shares, be allocated up to
1,650,000 Over-Allotment Shares as part of the allocation of the Offer Shares (‘‘Over-Allotment’’). For the
purpose of such a potential Over-Allotment, the Stabilization Manager, for the account of the
Underwriters, will be provided with up to 1,650,000 shares in the Company from the holdings of the
Selling Shareholder in the form of a securities loan. The total number of Over-Allotment Shares will not
exceed 15 percent of the number of Base Shares and, assuming 5,000,000, 4,411,765 and 3,947,362 New
Shares issued at the lower end, mid-point and upper end of the Price Range, respectively, may not exceed
1,650,000, 1,561,764 and 1,492,105 Over-Allotment Shares, respectively. The Selling Shareholder will grant
the Underwriters an option to acquire the borrowed shares at the Offer Price less agreed commissions (the
‘‘Greenshoe Option’’). This option will terminate 30 calendar days after the first day of trading.
The Stabilization Manager is entitled to exercise the Greenshoe Option to the extent Over-Allotment
Shares were allocated to investors in the Offering; such amount of Siltronic AG shares is to be reduced by
the number of Siltronic AG shares held by the Stabilization Manager as of the date on which the
Greenshoe Option is exercised and that were acquired by the Stabilization Manager in the context of
stabilization measures.
Once the Stabilization Period has ended, an announcement will be made within one week in various media
outlets distributed across the entire EEA as to whether stabilization measures were taken, when price
stabilization started and finished, and the price range within which stabilization was taken; the latter will be
made known for each occasion on which price stabilization measures were taken. Exercise of the
Greenshoe Option, the timing of its exercise and the number and type of shares concerned will also be
announced promptly in the same manner.
L.
LOCK-UP AGREEMENT, LIMITATIONS
ON
DISPOSAL
Siltronic AG, Wacker Chemie AG, Wacker-Chemie Dritte Venture GmbH and, with respect to the Offer
Shares received by them, the members of the Management Board have agreed that, without the prior
written consent of Citi and Credit Suisse on behalf of the Underwriters, they will not (subject to certain
exceptions), during the period ending 180 days after the date of this prospectus:
•
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any ordinary shares or any other securities convertible into or exercisable or
exchangeable for ordinary shares; or
33
•
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the ordinary shares;
whether any transaction described above is to be settled by delivery of our ordinary shares or such other
securities, in cash or otherwise. For additional information, see ‘‘Part 20: Underwriting.’’
M.
ADMISSION
TO THE
FRANKFURT STOCK EXCHANGE
AND
COMMENCEMENT
OF
TRADING
The Company will apply for admission of the Company’s shares to trading on the regulated market
segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and,
simultaneously, to the sub-segment thereof with additional post-admission obligations (Prime Standard) on
or about June 1, 2015. The listing approval for the Company’s shares is expected to be granted on June 10,
2015. Trading in the Company’s shares on the Frankfurt Stock Exchange is planned to commence on
June 11, 2015.
N.
DESIGNATED SPONSOR
Oddo Seydler Bank AG, Schillerstraße 27-29, 60313 Frankfurt am Main, Germany, has agreed to assume
the function of a designated sponsor of the Company’s shares traded on the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) for a period of at least two years. Pursuant to the designated sponsor
agreement expected to be concluded between the designated sponsor and the Company, the designated
sponsor will, among other things, place limited buy and sell orders for the Company’s shares in the
electronic trading system of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) during regular
trading hours. This is intended to achieve greater liquidity in the market for the Company’s shares.
O.
INTEREST
OF
PARTIES PARTICIPATING
IN THE
OFFERING
The Underwriters act for the Company on the Offering and coordinate the structuring and execution of
the Offering. Upon successful implementation of the Offering, the Underwriters will receive a commission.
As a result of these contractual relationships, the Underwriters have a financial interest in the success of
the Offering.
Furthermore, in connection with the Offering, each of the Underwriters and any of their respective
affiliates, acting as an investor for their own account, may acquire shares in the Offering and in that
capacity may retain, purchase or sell for its own account such shares or related investments and may offer
or sell such shares or other investments otherwise than in connection with the Offering. In addition, certain
of the Underwriters or their affiliates may enter into financing arrangements (including swaps or contracts
for differences) with investors in connection with which Underwriters (or their affiliates) may from time to
time acquire, hold or dispose of shares in the Company.
Some of the Underwriters or their affiliates have, and may from time to time in the future continue to
have, business relations with our Group (including lending activities) or may perform services for our
Group in the ordinary course of business.
The Selling Shareholder will offer the shares to partially divest its shareholding in the Company. The
Selling Shareholder, and its parent company, Wacker Chemie AG, will receive proceeds from the Offering
amounting to 63.2 percent of the gross proceeds assuming 4,411,765 New Shares and the Existing Shares
are placed, the Greenshoe Option is exercised in full and the Offer Price is set at the mid-point of the Price
Range. We intend to use the net proceeds we receive from the Offering to refinance amounts outstanding
under a A 150 million credit facility granted by Wacker Chemie AG. The Selling Shareholder and Wacker
Chemie AG therefore have a financial interest in the Offering.
Immediately prior to the Offering, the members of the Management Board did not hold any of the
Company’s shares. However, the two members of the Management Board will receive an aggregate
amount of A 102,000 in Offer Shares at the Offer Price (3,000 New Shares at the mid-point of the Price
Range representing 0.01 percent of outstanding shares following the completion of the Offering).
34
PART 4: PROCEEDS OF THE OFFERING AND COSTS OF THE OFFERING AND LISTING
Assuming an Offer Price of A 34.00 per ordinary share, which is the mid-point of the Price Range listed on
the cover page of this prospectus, gross proceeds from the offering are expected to total approximately
A 407.1 million (assuming placement of 4,411,765 New Shares, 6,000,000 Existing Shares and 1,561,764
Over-Allotment Shares). Under the same assumptions, after deducting underwriting discounts and
commissions and estimated offering expenses in the approximate amount of A 18.5 million, we estimate
that the net proceeds from this Offering will be approximately A 388.6 million.
We will only receive the proceeds of the offering resulting from the sale of New Shares. We will not receive
any proceeds from the sale of the Existing Shares or Over-Allotment Shares. We intend to issue up to
5,000,000 New Shares to achieve gross proceeds of approximately A 150 million. This is equal to 5,000,000,
4,411,765 and 3,947,368 New Shares at the lower end, mid-point and upper end of the Price Range,
respectively. The number of New Shares to be issued will be determined on June 8, 2015 by the
extraordinary shareholders’ meeting of the Company resolving the IPO Capital Increase. Because the IPO
Capital Increase will be registered prior to setting the Offer Price, the exact amount of gross proceeds can
be significantly above or below A 150 million.
Assuming issuance and placement of all New Shares at an Offer Price at the lower end, mid-point and
upper end of the Price Range, we would receive gross proceeds of A 150 million, A 170 million and
A 190 million, respectively. Under the same assumptions, we would receive estimated net proceeds of
approximately A 143.0 million, A 162.4 million and A 181.7 million at an Offer Price at the lower end, midpoint and upper end of the Price Range, respectively.
At the mid-point of the Price Range and assuming placement of the maximum number of Existing Shares
and full exercise of the Greenshoe Option, i.e. in total 7,561,764 shares, the Selling Shareholder will
receive gross proceeds of approximately A 257.1 million and estimated net proceeds of approximately
A 245.4 million.
Assuming an Offer Price of A 34.00 per Offer Share and the issuance of 4,411,765 New Shares, the
expenses related to the offering of the Offer Shares and listing of the Company’s entire share capital are
expected to total approximately A 5.3 million (excluding underwriting and placement commissions payable
to the Underwriters). Approximately A 3.3 million thereof will be borne by the Selling Shareholder, which
means that the Company will ultimately bear approximately A 1.9 million thereof. The Selling Shareholder
will bear the offering and listing related costs of the Company pro rata in accordance with the ratio of the
sum of the Existing Shares and Over-Allotment Shares sold to the number of Offer Shares sold.
Assuming an Offer Price at the lower end, mid-point and upper end of the Price Range and that the
maximum number of Offer Shares is placed (and the Greenshoe Option has been fully exercised) and
assuming further payment in full of the discretionary fee of up to A 3.8 million, A 4.1 million and
A 4.3 million, at the lower end, mid-point and upper end of the Price Range, respectively, the commissions
payable to the Underwriters will amount to A 12.3 million, A 14.0 million and A 15.6 million, respectively.
Thereof A 7.5 million, A 8.5 million and A 9.4 million are attributable to the placement of the Existing
Shares and Over-Allotment Shares and will be borne by the Selling Shareholder; the respective remaining
amounts will be borne by the Company.
Investors will not be charged expenses by the Company or the Underwriters.
35
PART 5: REASONS FOR THE OFFERING AND LISTING AND USE OF PROCEEDS
We intend to sell the New Shares and to have the Company’s shares admitted to trading on the regulated
market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and,
simultaneously, on the sub-segment thereof with additional post-admission obligations (Prime Standard) to
achieve better access to the capital markets.
The Selling Shareholder will offer the shares to partially divest its shareholding in the Company. The
Selling Shareholder is expected to receive 63.2 percent of the gross proceeds (assuming placement of
4,411,765 New Shares and 6,000,000 Existing Shares as well as full exercise of the Greenshoe Option and
an Offer Price at the mid-point of the Price Range).
We intend to issue up to 5,000,000 New Shares to achieve gross proceeds of approximately A 150 million.
This is equal to 5,000,000, 4,411,765 and 3,947,368 New Shares at the lower end, mid-point and upper end
of the Price Range, respectively.
Assuming the New Shares are placed at the mid-point of the Price Range, we estimate that we would need
to issue 4,411,765 New Shares to achieve gross proceeds of approximately A 150 million, and after
deducting expenses and commissions, that our net proceeds under these assumptions would amount to
approximately A 143.2 million.
We expect to use the net proceeds from this Offering for the following purposes and in the following
amounts:
•
we will first use net proceeds in an amount up to A 142.3 million to repay all remaining amounts
outstanding under the credit facility with Wacker Chemie AG which will become payable at the
completion of the Offering and under which A 142.3 million was outstanding as of March 31, 2015
(see ‘‘Part 15: Certain Relationships and Related Party Transactions—A. Relationship with Wacker
Chemie AG—Shareholder Loan Agreements’’);
•
any remaining amounts, if any, will be used to fund our ongoing operations and working capital and
for general corporate purposes.
The exact amount of net proceeds for the Company is dependent on both the Offer Price and the number
of New Shares that will be sold. The number of New Shares to be issued will be resolved upon by an
extraordinary shareholders’ meeting on June 8th, 2015, prior to the determination of the Offer Price.
Although the Company will use its best judgment to resolve on the issuance of such number of shares as
will result in gross proceeds of A 150 million, because the Offer Price is unknown at the time of the IPO
Capital Increase, it is possible that the Company will issue too few or too many New Shares with respect to
the targeted issue proceeds and that consequently the actual gross proceeds from the Offering for the
Company could be significantly above or below A 150 million. If the net proceeds for the Company are
insufficient to repay all amounts outstanding under the credit facility with Wacker Chemie AG, we will
repay any remaining amounts from cash on hand.
36
PART 6: DIVIDEND POLICY; RESULTS AND DIVIDENDS PER SHARE; USE OF PROFITS
A.
GENERAL PROVISIONS RELATING TO PROFIT ALLOCATION
AND
DIVIDEND PAYMENTS
The amount of dividends distributable to each shareholder is determined based on such shareholder’s
respective interests in the Company’s share capital. For a German stock corporation (Aktiengesellschaft),
the distribution of dividends for a given fiscal year and the amount and payment date thereof, are resolved
by the General Shareholders Meeting (Hauptversammlung) of the subsequent fiscal year. The General
Shareholders Meeting must be held within the first eight months of each fiscal year. Proposals for the
distribution of dividends will be issued by the Management Board and the Supervisory Board jointly or by
the Management Board and the Supervisory Board separately, with the Gerneral Shareholders Meeting
however not bound by those proposals.
Dividends may only be distributed from the distributable profit (Bilanzgewinn) of the Company. The
distributable profit is calculated based on the Company’s unconsolidated financial statements prepared in
accordance with the requirements of the German Commercial Code (Handelsgesetzbuch). Accounting
regulations under the German Commercial Code (Handelsgesetzbuch) differ from the IFRS in material
aspects.
When determining the distributable profit, net income or loss for the fiscal year (Jahresüberschuss/fehlbetrag) must be adjusted for profit/loss carry-forwards (Gewinn-/Verlustvorträge) from the prior fiscal
year and releases of or allocations to reserves. Certain reserves are required to be set up by law, and
amounts mandatorily allocated to these reserves in the given fiscal year must be deducted when calculating
the distributable profit. The Management Board must prepare unconsolidated financial statements
(balance sheet, income statement and notes to the unconsolidated financial statements) and a
management report for the previous fiscal year by the statutory deadline and present these to the auditors
and the Supervisory Board immediately after preparation. At the same time, the Management Board must
present to the Supervisory Board a proposal for the allocation of the Company’s distributable profits
pursuant to Section 170 para. 2 of the German Stock Corporation Act (Aktiengesetz). According to
Section 171 of the German Stock Corporation Act (Aktiengesetz), the Supervisory Board must review the
unconsolidated financial statements, the Management Board’s management report and the proposal for
the allocation of the distributable profit and report to the shareholders’ meeting in writing on the results.
The Supervisory Board must submit its report to the Management Board within one month after the
documents were received. If the Supervisory Board approves the financial statements after its review, these
are deemed adopted unless the Management Board and the Supervisory Board resolve to assign adoption
of the financial statements to the General Shareholders Meeting. If the Management Board and the
Supervisory Board choose to allow the General Shareholders Meeting to adopt the financial statements, or
if the Supervisory Board does not approve the financial statements, the Management Board must convene
a General Shareholders Meeting without delay.
The General Shareholders Meeting’s resolution on the allocation of the distributable profits requires a
simple majority of the votes cast. If the Management Board and the Supervisory Board adopt the financial
statements, they can allocate an amount of up to half of the Company’s net income for the year to other
surplus reserves. Additions to the legal reserves and loss carry-forwards must be deducted in advance when
calculating the amount of net income for the year to be allocated to other surplus reserves. Pursuant to
Section 20 of our articles of association, the General Shareholders Meeting may also resolve to distribute
the distributable profit by way of a dividend in kind in addition to or instead of a cash dividend, or it may
allocate further amounts to retained earnings (referred to as retained profit in the Company’s financial
statements) or carry such amounts forward as profit in the resolution on the appropriation of the
distributable profits. Dividends resolved by the General Shareholders Meeting are due and payable
immediately after the relevant General Shareholders Meeting, unless provided otherwise in the dividend
resolution, in compliance with the rules of the respective clearing system. Since all of the Company’s
dividend entitlements will be evidenced by one global dividend coupon deposited with Clearstream
Banking Aktiengesellschaft, Clearstream Banking Aktiengesellschaft will be able to transfer the dividends
to the shareholders’ custodian banks for crediting to their accounts and German custodian banks are under
an obligation to distribute the funds to their customers. Shareholders using a custodian bank located
outside Germany must inquire at their respective bank regarding the terms and conditions applicable in
their case. Notifications of any distribution of dividends resolved upon are published in the German
Federal Gazette (Bundesanzeiger) immediately after the General Shareholders Meeting. To the extent
dividends can be distributed by the Company in accordance with the German Commercial Code
(Handelsgesetzbuch) and corresponding decisions are taken, there are no restrictions on shareholder rights
37
to receive dividends. Any dividends not claimed within three years from their resolution become
time-barred. If dividend payment claims expire, dividends accrue to the Company. Generally, withholding
tax (Kapitalertragsteuer) is withheld from dividends paid. For more information on the taxation of
dividends, see ‘‘Part 19: Taxation—A. Overview of Material German Tax Considerations’’ and ‘‘Part 19:
Taxation—B. Overview of Material Luxembourg Tax Considerations.’’
B.
DIVIDEND POLICY
AND
EARNINGS PER SHARE
We currently intend to prioritize the support of our operations and planned investments in our business.
We may pay a dividend to distribute excess funds that we do not intend to use for investment or need as a
capital reserve to fund ongoing operations. Any future payment of dividends will depend upon, among
other factors, our results of operations, financial condition, contractual restrictions and capital
requirements.
We paid a dividend of A 269.5 million (A 5.39 per share) to our shareholders during the fiscal year ended
December 31, 2014 which exhausted our retained profit from prior years. No distributions of profits or
reserves were made to our shareholders in either of the fiscal years ended December 31, 2013 and
December 31, 2012 or in the fiscal year 2015 (up to the date of this prospectus).
38
PART 7: CAPITALIZATION AND INDEBTEDNESS: STATEMENT ON WORKING CAPITAL
The following tables set forth our capitalization and indebtedness as of March 31, 2015 on (i) an actual
historical basis and (ii) as adjusted for the effects of the IPO Capital Increase and the Offering, assuming
net proceeds of A 143.2 million from the issuance and sale of 4,411,765 New Shares in this Offering at an
Offer Price of A 34.00 per ordinary share, which is the mid-point of the Price Range listed on the cover
page of this prospectus, after deducting underwriting discounts and commissions and estimated offering
expenses we agreed to pay, and the application of the use of proceeds to repay in full the existing credit
facility with Wacker Chemie AG, as if the IPO Capital Increase, the Offering and the application of the
proceeds had taken place on March 31, 2015.
You should read the following table in conjunction with the sections entitled ‘‘Part 5: Reasons for the
Offering and Listing and Use of Proceeds,’’ ‘‘Part 9: Selected Consolidated Financial Data,’’ ‘‘Part 10:
Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and our historical
consolidated financial statements and related notes included elsewhere in this prospectus.
The as adjusted information presented in the table below is illustrative only, reflecting certain assumptions
that will change based on the actual offering price and other terms of this Offering, all determined at the
time at which we set the Offer Price.
A.
CAPITALIZATION
Actual as of
As adjusted
March 31, 2015 for the Offering(1)
(i)
(ii)
(unaudited)
(in E million)
Total current debt(2) . . . . . . .
Guaranteed . . . . . . . . . . .
Secured . . . . . . . . . . . . . .
Unsecured/unguaranteed(3)
Total non-current debt(4) . . .
Guaranteed . . . . . . . . . . .
Secured . . . . . . . . . . . . . .
Unsecured/unguaranteed . .
Shareholders’ equity(5) . . . . .
Share capital(6) . . . . . . . . .
Capital reserves . . . . . . . .
Other reserves(7) . . . . . . . .
Non-controlling interests . .
Total . . . . . . . . . . . . . . . . . .
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274.3
—
—
274.3
39.2
—
—
39.2
197.5
100.0
946.8
(850.9)
1.6
511.0
131.1
—
—
131.1
39.2
—
—
39.2
340.7
117.6
1,072.4
(850.9)
1.6
511.0
(1)
As adjusted for the issuance of 4,411,765 New Shares as part of the IPO Capital Increase and for the Offering, assuming the
New Shares were placed at A 34.00 per ordinary share (the mid-point of the Price Range) resulting in gross proceeds of
A 150.0 million and net proceeds of A 143.2 million, the application of which resulted in the repayment of A 142.3 million of
current debt.
(2)
Referred to as ‘‘total current debt’’ in the ESMA update of the CESR recommendations of March 20, 2013, ESMA/2013/319
(the ‘‘ESMA Update’’). This is referred to as current financial and current other liabilities in the Company’s financial
statements.
(3)
Actual as of March 31, 2015 comprised of current financial liabilities in an amount of A 142.3 million outstanding under a
A 150 million credit facility with Wacker Chemie AG and A 132.0 million of other current liabilities.
(4)
Referred to as ‘‘total non-current debt (excluding current portion of long-term debt)’’ in the ESMA Update. This is referred to
as non-current financial liabilities in the Company’s financial statements.
(5)
‘‘Shareholder’s equity’’ is referred to as ‘‘shareholder’s equity’’ in the Company’s financial statements and also includes equity
attributable to non-controlling shareholders.
(6)
‘‘Share capital’’ is referred to as ‘‘subscribed capital’’ in the Company’s financial statements.
(7)
‘‘Other reserves’’ is referred to as ‘‘other equity items’’ plus ‘‘accumulated deficit’’ in the Company’s financial statements.
39
B.
INDEBTEDNESS
Actual as of
As adjusted
March 31, 2015 for the Offering(1)
(i)
(ii)
(unaudited)
(in E million)
A. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Liquidity(2) (A) + (B) + (C) . . . . . . . . . . . . . . . . . . . .
E. Current financial receivable . . . . . . . . . . . . . . . . . . . . .
F. Current bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Current portion of non-current debt(3) . . . . . . . . . . . . .
H. Other current financial liabilities(4) . . . . . . . . . . . . . . . .
I. Current financial debt(5) (F) + (G) + (H) . . . . . . . . . .
J. Net current financial indebtedness(6) (I) (E) (D) .
K. Non-current bank loans . . . . . . . . . . . . . . . . . . . . . . . .
L. Bonds issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M. Other non-current loans(7) . . . . . . . . . . . . . . . . . . . . . .
N. Non-current financial indebtedness(8) (K) + (L) + (M)
O. Net financial indebtedness(9) (J) + (N) . . . . . . . . . . . . .
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197.6
—
—
197.6
—
—
—
274.3
274.3
76.7
—
—
39.2
39.2
115.9
198.5
—
—
198.5
—
—
—
132.0
132.0
(66.5)
—
—
39.2
39.2
(27.3)
(1)
As adjusted for the issuance of 4,411,765 New Shares as part of the IPO Capital Increase and for the Offering, assuming the
New Shares were placed at A 34.00 per ordinary share (the mid-point of the Price Range) resulting in gross proceeds of
A 150.0 million and net proceeds of A 143.2 million, of which A 142.3 million were used to repay current debt.
(2)
Liquidity is the total of cash and cash equivalents and marketable securities.
(3)
The item ‘‘current portion of non-current debt’’ as referred to in the ESMA Update comprises financial liabilities that become
due within the next twelve months and that were initially categorized as non-current financial indebtedness.
(4)
Other current financial liabilities comprises current financial liabilities and other current liabilities.
(5)
Current financial debt is the total of current bank debt, current portion of non-current debt and other current financial debt.
(6)
Net current financial indebtedness is the difference between current financial debt and the sum of liquidity and current
financial receivables.
(7)
Other non-current loans consists of shareholder loans from Samsung to SSW.
(8)
Non-current financial indebtedness is the total of other non-current bank loans, bonds issued and other non-current loans.
(9)
Net financial indebtedness is the total of current financial indebtedness and non-current financial indebtedness.
Our indirect and contingent indebtedness amounted to A 68.7 million as of March 31, 2015. These
contingent obligations mainly comprised long-term lease obligations for land and purchase commitments
for property, plant and equipment. For information regarding our obligations from rent and operating
leases as of the end of the 2014 fiscal year, see ‘‘Part 10: Management’s Discussion and Analysis of Financial
Condition and Results of Operations—E. Liquidity and Capital Resources—Liabilities.’’
C.
STATEMENT
ON
WORKING CAPITAL
We are of the opinion that our Group is in a position to meet the payment obligations that become due
within at least the next twelve months from the date of this prospectus.
40
PART 8: DILUTION
The net book value of the Company, defined as total assets less total liabilities and intangible assets,
amounted to A 167.5 million as of March 31, 2015, and amounted to A 6.70 per share based on 25,000,000
outstanding shares of the Company immediately prior to the issuance of the New Shares.
The dilutive effect of the Offering is illustrated in the table below demonstrating the amount by which the
Offer Price at the lower end, mid-point and upper end of the Price Range exceeds the net book value of
the Company per share after completion of the Offering (assuming full exercise of the Greenshoe Option).
In this respect, the net book value per share is adjusted for the effects of the issuance and sale of the New
Shares (assuming an issuance of 5,000,000, 4,411,765 and 3,947,368 New Shares at the lower end,
mid-point and upper end of the Price Range, respectively) resulting in approximately A 150 million gross
proceeds for the Company an assumed increase in net book value of A 143.0 million, A 143.2 million and
A 143.3 million, respectively. The assumed increase is based on the expected net proceeds. The adjusted
amount is expressed as a per share figure, assuming 30,000,000, 29,411,765 and 28,947,368 outstanding
shares of the Company upon completion of the Offering at the lower end, mid-point and upper end of the
Price Range, respectively (this per share figure being referred to as ‘‘Post IPO net book value per share in
the Company’’).
Lower End
Price per Company’s share (in A) . . . . . . . . . . . . . . . . . . . . . . . . .
Number of New Shares issued to achieve A 150 million gross
proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net book value per share as of March 31, 2015 (assuming
25,000,000 outstanding Company’s shares immediately prior to
the Offering) (in A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Post-IPO net book value per share in the Company (in A) . . . . . . .
Amount by which the Offer Price per share in the Company
exceeds the Post-IPO net book value per share in the Company
(immediate dilution per Share) (in A) . . . . . . . . . . . . . . . . . . . .
Immediate dilution (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
Mid-point
Upper End
.
30.00
34.00
38.00
.
5,000,000
4,411,765
3,947,368
.
.
6.70
10.35
6.70
10.56
6.70
10.74
.
.
19.65
65.5
23.44
68.9
27.26
71.7
PART 9: SELECTED CONSOLIDATED FINANCIAL DATA
The financial information contained in the following tables is taken or derived from our audited consolidated
financial statements as of and for the years ended December 31, 2014, and 2013 and 2012, our unaudited
interim condensed consolidated financial statements as of and for the three-month period ended March 31,
2015, the audited unconsolidated financial statements of SSW as of and for the years ended December 31, 2013
and 2012, the audited unconsolidated financial statements of Siltronic AG as of and for the year ended
December 31, 2014 and our internal reporting system.
We prepared our consolidated financial statements in accordance with IFRS as adopted by the EU. Our
consolidated financial statements as of and for the years ended December 31, 2014, December 31, 2013 and
December 31, 2012 have been included in this prospectus beginning on page F-17 and the unconsolidated
financial statements of Siltronic AG as of and for the year ended December 31, 2014 have been included in this
prospectus beginning on page F-71. Each have been audited by KPMG AG Wirtschaftsprüfungsgesellschaft
(‘‘KPMG’’) and in each case, KPMG has issued an unqualified auditor’s report (uneingeschränkter
Bestätigungsvermerk) thereon. The audited unconsolidated financial statements of SSW as of and for the years
ended December 31, 2013 and 2012 have been reproduced in this prospectus beginning on page F-87. They have
been audited by Ernst & Young LLP (Singapore) and Ernst & Young LLP (Singapore) has issued an
unqualified auditor’s report (uneingeschränkter Bestätigungsvermerk) thereon.
Based on an agreement dated January 24, 2014, the Group increased its share in SSW from 50 percent to
78 percent by means of a capital increase. The Group accounted for this using the acquisition method because
control was transferred to the Group. The acquisition of the majority stake in SSW resulted in its consolidation
into the Group and had a significant impact on the Company’s statement of financial position and statement of
profit and loss. Hence, it is difficult to compare the financial statements from 2014 with those from preceding
periods.
The following selected consolidated financial data should be read in conjunction with, and are qualified by
reference to, ‘‘Part 10: Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’ beginning on page 50, the consolidated financial statements beginning on page F-2 and additional
financial information contained elsewhere in this prospectus.
42
A.
SELECTED CONSOLIDATED FINANCIAL DATA
Consolidated Statement of Profit or Loss
Three-month
period ended
March 31,
2015
2014
2014
2013
2012
(unaudited)
(audited)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.7
196.4
846.0
743.0
868.0
(199.1) (187.3) (769.4) (658.8) (786.9)
39.6
9.1
76.6
84.2
81.1
(8.5)
(16.2)
(4.2)
(2.4)
(7.5)
(15.9)
(4.2)
21.1
(30.5)
(64.3)
(16.0)
20.6
(28.7)
(58.8)
(13.9)
(36.0)
(34.5)
(66.8)
(18.9)
(18.3)
Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
2.6
(13.6)
(53.2)
(57.4)
Loss from investment in joint venture(1) . . . . . . . . . . . . . . .
—
(3.5)
(3.5)
(42.5)
(26.6)
Operating profit/(loss) less loss from investment in joint
venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
(0.9)
(17.1)
(95.7)
(84.0)
Interest income and expense, net . . . . . . . . . . . . . . . . . . . .
Other financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.6)
(1.5)
(0.2)
(0.7)
(1.4)
(6.3)
6.1
(9.5)
5.3
(5.7)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.1)
(0.9)
(7.7)
(3.4)
(0.4)
Profit/(loss) before taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2
(1.8)
(24.8)
(99.1)
(84.4)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4.3)
(1.2)
(2.2)
(10.2)
(6.2)
Net profit/(loss) for the period . . . . . . . . . . . . . . . . . . . . .
Of which attributable to Siltronic AG shareholders . . . . . . .
Of which attributable to non-controlling interest . . . . . . . . .
1.9
3.2
(1.3)
(3.0)
(0.7)
(2.3)
(27.0) (109.3)
(16.0) (109.3)
(11.0)
—
(90.6)
(90.6)
—
Profit/(loss) per common share in Euro (basic / diluted)(2) .
0.06
(0.01)
(0.32)
(1.81)
Selling expenses . . . . . . . . . . . . . . . . . . .
Research and development expenses . . . .
General administration expenses . . . . . . .
Other operating income and expense, net .
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(2.19)
(1)
Consolidation of SSW started January 24, 2014, after we agreed to acquire a majority stake in SSW. Before this date, SSW was
recorded using the equity method under which the loss from investment in joint venture represents Siltronic AG’s share of the
net loss of SSW.
(2)
Net loss attributable to Siltronic AG shareholders for the period divided by 50,000,000 shares (average number of shares
outstanding in all periods shown). Since March 31, 2015, the Company has implemented new articles of association and will
have 25,000,000 shares outstanding immediately prior to the issuance of the New Shares.
43
As of
March 31,
2015
(unaudited)
Intangible assets(1) . . . . . . . . . .
Property, plant and equipment(2)
Non-current financial assets(3) . .
Other non-current assets(4) . . . .
.
.
.
.
30.0
573.6
—
8.0
29.7
571.7
—
7.6
0.5
332.3
142.6
15.3
1.2
430.2
192.4
10.6
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611.6
609.0
490.7
634.4
Inventories(5) . . . . . . . . . . .
Trade receivables(5) . . . . . . .
Financial receivables(6) . . . .
Other current assets(7) . . . .
Cash and cash equivalents(5)
.
.
.
.
.
144.3
122.9
—
27.1
197.6
138.4
111.1
—
24.6
187.4
86.5
98.1
372.0
33.2
12.5
95.5
105.9
258.1
28.5
11.5
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
491.9
461.5
602.3
499.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,103.5
1,070.5
1,093.0
1,133.9
Equity attributable to Siltronic AG shareholders . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
195.9
1.6
309.1
2.7
790.2
—
748.3
—
Equity(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
197.5
311.8
790.2
748.3
.
.
.
.
428.5
27.2
39.2
53.4
328.1
26.3
35.8
51.0
185.0
22.9
0.0
4.9
226.7
32.2
0.0
12.5
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
548.3
441.2
212.8
271.4
Trade liabilities(5) . . . . . . . .
Other current provisions(13) .
Financial liabilities(14) . . . . .
Other current liabilities(15) .
.
.
.
.
69.2
14.2
142.3
132.0
55.8
12.0
176.1
73.6
39.7
21.0
—
29.3
54.7
15.6
—
43.9
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
357.7
906.0
317.5
758.7
90.0
302.8
114.2
385.6
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
1,103.5
1,070.5
1,093.0
1,133.9
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.
(9)
Provision for pensions . . . . . .
Other non-current provisions(10)
Financial liabilities(11) . . . . . . . .
Other non-current liabilities(12) .
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As at December 31,
2014
2013
2012
(in E millions)
(audited)
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(1)
In 2014, intangible assets increased substantially by A 29.2 million due to the acquisition of SSW comprising goodwill
(A 20.5 million) and other intangibles assets (A 9.8 million).
(2)
Property, plant and equipment as at December 31, 2014 increased substantially by A 239.4 million, of which A 316 million relate
to the acquisition of SSW.
(3)
Prior to 2014, non-current financial assets primarily included the investment in the equity and loans to SSW, which do not
appear on the statement of financial position as at December 31, 2014 due to the acquisition and consolidation of SSW in 2014.
(4)
As of December 31, 2014, the line item other non-current assets includes A 7.1 million of deferred taxes. Prepayments we made
to SSW are no longer shown as at December 31, 2014 because SSW was consolidated at that date. As of December 31, 2013, the
line item consists of A 8.6 million prepayment to SSW, A 2.4 million derivative financial instruments and A 4.0 million of deferred
taxes. As of December 2012, the amount disclosed includes no prepayments, A 2.9 million derivative financial instruments and
deferred tax assets of A 7.1 million.
(5)
The acquisition of SSW in 2014 led to increases in inventories, trade receivables, trade liabilities and other liabilities and cash
and cash equivalents.
(6)
Prior to 2014, financial receivables consisted of amounts due from the Wacker group under the cash pooling arrangements and
receivables from the Wacker group arising in connection with the profit and loss transfer agreement (see ‘‘Part 15: Certain
Relationships and Related Party Transactions—A. Relationship with Wacker Chemie AG’’).
(7)
As of December 31, 2014, the line item other current assets includes a A 9.5 million advance payment to the Wacker pension
fund (Pensionskasse) (December 31, 2013: A 9.5 million and December 31, 2012: A 8.5 million), A 3.9 million of derivative
financial instruments (December 31, 2013: A 13.4 million and December 31, 2012: A 5.2 million) and A 3.2 million government
grants (December 31, 2013: A 3.4 million and December 31, 2012: A 8.7 million).
44
(8)
For the three months ended March 31, 2015, equity was primarily impacted by an increase in provision for pensions. In 2014, we
paid a dividend to our shareholders of A 269.5 million. See ‘‘Part 10: Management’s Discussion and Analysis of Financial
Condition and Results of Operations—E. Liquidity and Capital Resources.’’
(9)
Provisions for pensions as at March 31, 2015 were calculated based on an interest rate of 1.65 percent in Germany and
3.61 percent in the U.S. As at December 31, 2014, provisions for pensions were calculated based on an interest rate of
2.3 percent in Germany and 3.8 percent in the U.S. Of the total increase from December 2014 to March 2015, A 91.2 million was
attributable to the change in interest rate assumptions. As at December 31, 2013 the interest rates used to calculate provisions
for the German and U.S. pensions had been 3.8 percent and 4.8 percent, respectively. The change in assumptions led to an
increase of A 135.5 million. As at December 31, 2012 the interest rates used to calculate provisions for the German and U.S.
pensions amounted to 3.5 percent and 4.0 percent, respectively.
(10) At the end of both December 2014 and December 2013, other non-current provisions almost entirely relate to anniversary
payments and early retirement. As of December 31, 2014, December 31, 2013 and December 31, 2012 provisions for
anniversary payments add up to A 11.6 million, A 10.5 million and A 11.3 million respectively. The provision for early retirement
was A 13.1 million, A 10.9 million and A 13.9 million for the periods ended December 31, 2014, December 31, 2013 and
December 31, 2012. At the end of the year 2012, a provision for tax with an amount of A 6.8 million is included.
(11) Non-current financial liabilities as at December 31, 2014 increased by A 35.8 million due to the acquisition of SSW, the liabilities
of which comprise a loan Samsung has granted to SSW. See ‘‘Part 10: Management’s Discussion and Analysis of Financial
Condition and Results of Operations—B. Factors Affecting the Comparability of Our Results—Scope of Consolidation.’’
(12) Other non-current liabilities include prepayments received from customers (to the extent the maturities exceed one year) with
A 45.5 million as at December 31, 2014, A 3.2 million as at December 31, 2013 and A 10.6 million as at December 31, 2012. The
larger amount of prepayments as at December 31, 2014 also reflects prepayments received by SSW. The remainder is due to
deferred taxes and financial instruments.
(13) The primary items included in other current provisions are related to taxes (December 31, 2014 A 4.0 million; December 31,
2013: A 10.4 million; and December 31, 2012: A 3.4 million). The majority of the remaining amounts are related to personnel
cost.
(14) Financial liabilities consists of amounts due to Wacker group entities under short-term credit facility and cash pooling
arrangements.
(15) Other current liabilities comprise the short-term portions of prepayments received (December 31, 2014: A 21.6 million,
December 31, 2013: A 7.8 million and December 31, 2012: A 16.3 million), the short-term portions of derivative financial
instruments (December 31, 2014: A 29.7 million, December 31, 2013: A 0.2 million and December 31, 2012: A 3.0 million),
personnel related liabilities arising from vacation or overtime not yet taken or performance based payments including bonuses
(December 31, 2014: A 17.8 million, December 31, 2013: A 16.7 million and December 31, 2012: A 19.2 million) and effective tax
liabilities (December 31, 2014: A 3.0 million, December 31, 2013: A 3.2 million and December 31, 2012: A 2.8 million).
Consolidated Cash Flow Statement
Three-month
period ended
March 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
(audited)
Cash flow from (used in) operating activities
Cash flow from (used in) investing activities .
Cash flow from (used in) financing activities .
Changes due to exchange-rate fluctuations . .
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Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . .
B.
ADDITIONAL FINANCIAL INFORMATION
AND
47.7
87.2 124.7
47.7
(46.2)
(8.1) 18.1 (11.2) (31.3) (105.4)
(33.5) (78.0) 58.6 (13.8) 158.3
4.1
0.1
2.8
(1.6)
(0.4)
10.2
27.4
174.9
1.0
6.3
KEY PERFORMANCE INDICATORS
Our principal performance measures of Adjusted Sales, Adjusted EBITDA, Adjusted Net Cash Flow, and
Adjusted Capital Expenditures reflect group numbers and aggregated adjustments to present our historical
financial information taking SSW into consideration. The aforementioned key performance indicators are
not necessarily indicative of the results of operations or related effects had SSW been consolidated prior to
January 24, 2014 in accordance with IFRS. These performance measures have not been prepared in
accordance with IFRS, do not constitute pro forma information and are not comparable with our financial
information prepared in accordance with IFRS.
Adjusted Sales
Adjusted Sales help us measure the impact of general economic and industry trends and conditions,
changes in our production volumes and product pricing. Our historical sales reflect the development of the
45
wafer surface area (volume) of the wafers we have sold as well as the average prices at which we have sold
them. Both of these factors are affected to a significant extent by general economic developments,
competition, market capacity, and foreign currency developments. In addition, we consider Adjusted Sales
to evaluate the effectiveness of our sales activities and the effect of competition over a given period. The
tables below contain a reconciliation of Adjusted Sales taking SSW into consideration:
Three-month
period ended
March 31,
2015
2014(1)
Group sales (as reported) . . . . . . . . . . . . . . . . . . . . . .
Adjustment: Sales reported by SSW before February,
2014(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: Group sales to SSW before February 2014
Adjustment: Sales reported by SSW to Siltronic AG,
Siltronic Japan and Siltronic Corp before February
2014(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014(1)
2013
(in E millions)
(unaudited)
196.4
....
238.7
....
....
—
—
12.6
(0.8)
12.6 193.3
(0.8) (11.5)
237.7
(23.0)
....
—
(4.4)
(4.4)
(52.7)
Adjusted Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.7
203.8
846.0
2012
743.0
853.4
(49.3)
875.5
868.0
1,030.0
(1)
Consolidation of SSW started January 24, 2014, after we agreed to acquire a majority stake in SSW. Before that date, SSW was
accounted for using the equity method.
(2)
Amounts are converted from Singapore dollars into Euro using the respective rates stated in ‘‘Part 2: General Information—
G. Currencies and Exchange Rates.’’
(3)
Sales reported by SSW before February 2014 include sales of SSW to Siltronic Group companies.
Quarterly performance of Adjusted Sales (taking SSW into account) for 2014 is presented in the table
below:
Year ended
December 31,
2014(1)
Group sales (as reported) . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: Sales reported by SSW before February 2014(1)(2)
Adjustment: Group sales to SSW before February 2014 . . . .
Adjustment: Sales reported by SSW to Siltronic AG, Siltronic
Japan and Siltronic Corp before February 2014(2)(3) . . . . . .
.
.
.
846.0
12.6
(0.8)
.
(4.4)
Adjusted Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853.4
Q4
Q3
(in E millions)
(unaudited)
223.2 216.0
—
—
—
—
Q2
Q1
210.4
—
—
196.4
12.6
(0.8)
(4.4)
—
—
—
223.2
216.0
210.4
203.8
(1)
Consolidation of SSW started January 24, 2014, after we agreed to acquire a majority stake in SSW. Before that date, SSW was
accounted for using the equity method.
(2)
(3)
Sales reported by SSW before February 2014 include sales of SSW to Group companies.
Adjusted EBITDA
We believe that Adjusted EBITDA is a useful measure that is more reflective of our on-going operating
performance than operating profit/(loss) or operating profit/(loss) less loss from investment in joint
venture and we use it to facilitate a comparison of our operating performance from period-to-period and
to provide for a more complete understanding of our historical operating performance and the factors and
trends affecting our business. We also use Adjusted EBITDA as the most important method for planning
and forecasting overall expected performance and for evaluating actual results against expectations on a
quarterly and annual basis and as a performance evaluation metric linked to payments under certain
compensation plans for senior executives (see ‘‘Part 13: Management’’).
We define Adjusted EBITDA as earnings as if all major effects have been considered for a full
consolidation of SSW in our Group before January 1, 2012, before net financial result, income tax expense,
depreciation, amortization and impairment and restructuring expenses in excess of A 5 million in any
period. All of the omitted items are either (i) non-cash items or (ii) items that we do not consider reflective
of our on-going operating performance.
46
Because it omits non-cash items, we feel that Adjusted EBITDA is less susceptible to variances in actual
performance resulting from depreciation, amortization, impairments and other non-cash charges and more
reflective of our on-going operating performance. We feel this is particularly true when comparing periods
in which SSW was accounted for at equity to the periods in 2014 in which it was consolidated, because
depreciation relating to SSW has had a large impact on our operating profit/(loss) less loss from
investment in joint venture since its consolidation within our Group’s results. Below is a reconciliation of
Adjusted EBITDA starting from operating profit/(loss):
Three-month
period ended
March 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
Operating profit/(loss) (as reported) . . . . . . . . . . . . . . . . . . . . .
Loss from investment in joint venture (as reported) . . . . . . . . . .
8.3
—
2.6 (13.6) (53.2) (57.4)
(3.5) (3.5) (42.5) (26.6)
Operating profit/(loss) less loss from investment in joint venture .
Depreciation, amortization less write-up of the Group (as
reported) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
(0.9) (17.1) (95.7) (84.0)
(1)
EBITDA
31.8
32.4
149.2
122.1
92.8
40.1
31.5
132.1
26.4
8.8
.
—
3.5
3.5
42.5
26.6
.
—
(5.9)
.
.
—
—
9.1
—
.
—
..................................
40.1
.........................................
Adjustment: reversal of loss from investment in SSW (as
reported)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: operating loss as reported by SSW before February
2014(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: depreciation as reported by SSW before February
2014(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: restructuring charges(5) . . . . . . . . . . . . . . . . . . . . .
Adjustment: currency and remeasurement gain resulting from
acquisition of SSW(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
Adjusted EBITDA
(5.9) (68.9) (37.0)
9.1
—
112.6
—
107.7
16.4
—
—
112.6
122.5
(21.1) (21.1)
17.1
117.7
(1)
The Wacker group reports EBITDA for Siltronic as if SSW had been consolidated for the entire year. We report our results
with the consolidation of SSW starting January 24, 2014.
(2)
Our reported loss from investment in SSW is added to EBITDA of the Group to calculate Adjusted EBITDA.
(3)
Consolidation of SSW started after we agreed to acquire a majority stake in SSW on January 24, 2014. In January 2014 and the
prior periods shown, SSW was accounted for using the equity method. As such, operating loss and depreciation and
amortization of SSW prior to January 24, 2014 have not been included in our Group EBITDA.
(4)
(5)
2012 restructuring charges include adjustments for personnel costs of A 11.6 million and wind down costs in Hikari and Portland
in an aggregate amount of A 7.8 million, less income from reversals of provisions for restructuring of A 3.0 million.
(6)
Adjustment made for the nonrecurring effect resulting from the acquisition of SSW as of January 24, 2014.
(7)
Adjusted EBITDA including depreciation and amortization (excluding impairment) yields an adjusted EBIT of negative
A 75.5 million in 2012, negative A 87.3 million in 2013 and negative A 31.6 million in 2014.
47
Quarterly performance of Adjusted EBITDA (taking SSW into account) for the year ended December 31,
2014 was as follows:
Year ended
December 31,
2014
Q4
Q3
(in E millions)
(unaudited)
Q2
Q1
Operating profit/(loss) (as reported) . . . . . . . . . . . . . . . . . . .
Loss from investment in joint venture (as reported) . . . . . . . .
(13.6)
(3.5)
1.1
—
(7.7) (9.6)
—
—
2.6
(3.5)
Operating loss less loss from investment in joint venture . . . .
Depreciation, amortization and impairments of the Group (as
reported) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17.1)
1.1
(7.7) (9.6)
(0.9)
149.2
38.1
40.9
37.8
32.4
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: reversal of loss from investment in SSW (as
reported)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: operating loss as reported by SSW before
February 2014(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: depreciation as reported by SSW before February
2014(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: currency and remeasurement gain resulting from
acquisition of SSW(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132.1
39.2
33.2
28.2
31.5
3.5
—
—
—
3.5
(5.9)
—
—
—
(5.9)
9.1
—
—
—
9.1
(21.1)
—
—
—
(21.1)
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117.7
39.2
33.2
28.2
(1)
17.1
(1)
The Wacker group reports EBITDA for Siltronic as if SSW had been consolidated for the entire year. We report our results
with the consolidation of SSW starting January 24, 2014.
(2)
Our reported loss from investment in SSW is added to EBITDA of the Group to calculate Adjusted EBITDA.
(3)
Consolidation of SSW started after we agreed to acquire a majority stake in SSW on January 24, 2014. In January 2014, SSW
was accounted for using the equity method. As such, operating loss and depreciation and amortization of SSW prior to
January 24, 2014 have not been included in our Group EBITDA.
(4)
(5)
Adjustment made for the nonrecurring effect resulting from the acquisition of SSW as of January 24, 2014.
Adjusted Net Cash Flow
We define Adjusted Net Cash Flow as the sum of cash flow generated by/(used in) operating activities and
investing activities of our Group, adjusted for (i) cash flow from/(used in) operating and investing activities
of SSW before February 2014, (ii) the acquisition of SSW (net of cash acquired) and (iii) payments for
loans of the Group in SSW and taking into account (iv) changes in prepayments from customers which can
be a positive or negative value. We exclude changes in prepayments from customers – the year-on-year
change in the difference between the total prepayments that we receive in a fiscal year and total
prepayments refunded during the same year – because the prepayments are of a long-term nature. The
prepayments we have received from certain customers and which we apply against future sales to these
customers are generally of a one-off nature, taking several years to be fully applied. They arise from time
to time and are usually intended as incentives for us to make further investments in our manufacturing
capabilities. Adjusted net cash flow is accordingly a useful measure to understand the movements in our
48
cash balances and the cash needs of our business. Below is a reconciliation of Adjusted Net Cash Flow
from our reported figures:
Three-month
period ended
March 31,
2015
2014(1)
Cash flows generated from/(used in) operating activities of the
Group (as reported) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow used in investing activities (as reported) . . . . . . . . . .
47.7
(8.1)
87.2
18.1
39.6
105.3
Adjustment: net cash flows generated from/(used in) operating
activities of SSW as reported by SSW before February 2014(2) .
Adjustment: net cash flows used in investing activities of SSW as
reported by SSW before February 2014(2) . . . . . . . . . . . . . . . .
Adjustment: payments for loans from the Group in SSW . . . . . .
Adjustment: acquisition of SSW, net of cash acquired . . . . . . . .
Adjustment: changes in prepayments from customers at SSW
before February 2014(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment: changes in prepayments from customers of the
Group and to SSW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3
Adjusted Net Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41.9
—
—
—
—
—
2014(1)
2013
2012
(in E millions)
(unaudited)
(0.9)
124.7
47.7
(46.2)
(11.2) (31.3) (105.4)
113.5
(0.9)
16.4
(151.6)
59.3
64.5
(0.1) (0.1) (11.0)
—
—
—
(26.2) (26.2)
—
(0.1)
(0.1) (17.2)
(59.2) (56.2)
18.8
30.0
(77.2)
29.9
—
0.0
24.5
(0.2)
72.0
(134.6)
(1)
Consolidation of SSW started after we agreed to acquire the majority stake in SSW. Before this acquisition, SSW was recorded
using the equity method. As such, cash inflows and outflows of SSW prior to February 2014 have not been included in our
Group numbers.
(2)
Amounts are converted from Singapore dollars into Euro using the spot rates for the relevant dates stated in ‘‘Part 2: General
Information—G. Currencies and Exchange Rates.’’
Adjusted Capital Expenditure
Adjusted Capital Expenditure comprises additions to property, plant and equipment and additions to
noncurrent intangible assets. The measure does not take into account additions which result from
consolidation. We use adjusted capital expenditures to track our levels of investment to anticipate
upcoming losses attributable to depreciation. The table below presents a reconciliation of Adjusted Capital
Expenditure taking SSW into consideration.
Three-month
period ended
Year ended
March 31,
December 31,
2015
2014(1)
2014(1)
2013
2012
(in E millions)
(unaudited)
Additions to property, plant and equipment including
construction of the Group (as reported)(1) . . . . . . .
Additions to property, plant and equipment including
construction of SSW before February 2014(2) . . . . .
assets under
..........
assets under
..........
Adjusted Capital Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3
6.8
40.5
30.4
72.6
—
0.1
0.1
9.3
71.7
4.3
6.9
40.6
39.7
144.3
(1)
Before our acquisition of a majority stake in SSW, SSW was recorded using the equity method. As such, capital expenditure of
SSW for January 2014 has not been included in our Group numbers.
(2)
49
PART 10: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our consolidated financial statements, which are included in this prospectus beginning on
page F-2 as well as the data set forth in ‘‘Part 9: Selected Consolidated Financial Data.’’
The following discussion contains certain forward-looking statements that reflect our plans, estimates and
beliefs. Our results may differ materially from those discussed in these forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to, those discussed in ‘‘Part 1: Risk
Factors’’ beginning on page 1.
A.
OVERVIEW
We are the world’s third largest producer of semiconductor silicon wafers made from hyperpure silicon
with a global revenue share of 14 percent in 2013, according to Gartner. Silicon has been used for more
than half a century as the raw material of choice in microelectronics and the related semiconductor wafers.
Silicon constitutes the base substrate for nearly all semiconductor devices, essentially providing the
foundation for the entire, global electronics industry. Our business traces its origins to the start of research
and development of high-purity silicon in 1953 and has existed in its current form as Siltronic AG since
2004. Since the development of the first semiconductor silicon wafer in 1962, we have quickly recognized
the opportunities and prospects that presented themselves in the semiconductor industry and have
strategically invested in this technology.
Hyperpure semiconductor silicon wafers are used for increasingly finer structures, referred to as ‘‘design
rules,’’ in the nanometer range (measured in billionths of a meter). As a result, increasingly powerful and
energy efficient generations of chips are becoming more feasible to produce. Our semiconductor silicon
wafers support these trends and form the basis of the most complex semiconductor components, including
high-voltage applications, low resistivity devices in automotive engineering and telecommunications as well
as large-scale integrated microprocessors and memory modules for information processing. Hence, our
semiconductor silicon wafers can be found in numerous everyday objects including cell phones, laptops,
cars and many other consumer goods.
We serve all of the top 20 leading semiconductor silicon wafer consumers with our broad wafer portfolio
and maintain long-term relationships with all our major customers. In 2014, our five largest customers
were, in alphabetical order, Infineon Technologies, Intel Corporation, Micron Technology, Samsung
Electronics, and Taiwan Semiconductor Manufacturing Company (TSMC). We produce our high quality
wafers through our multinational manufacturing network in the United States, Europe and Asia, with
facilities strategically located near highly educated work forces and in close proximity to our customers. We
believe that we deliver the highest quality customer service and provide our customers with single local
access points for our entire semiconductor silicon wafer portfolio. We are committed to providing wafer
qualities and specifications that meet or exceed our customers’ wafer demands.
We are dedicated to drive innovation in the semiconductor silicon wafer industry. We work in close
collaboration with our customers to continually advance their products and solutions by manufacturing
polished and epitaxial wafers according to the most advanced design rules as specified by our customers.
For example, we are currently working with our customers on the commercialization of the next design
rule, commonly referred to as ‘‘11nm.’’ We have also started development on the following design rule,
commonly referred to as ‘‘8nm,’’ with a commercialization target in 2017, as we are committed to being
‘‘one generation ahead.’’ In addition, we utilize the leading float zone, or ‘‘FZ,’’ technology for wafers up
to 200 mm in diameter for wafers with extremely stable resistivity performance and high voltage
capabilities.
We have realized significant efficiency improvements and cost reductions over the last several years. Our
cost reduction roadmap has secured total cost reductions of more than A 80 million from 2012 to 2013
(based on an application of the 2012 cost basis to 2013 volumes, adjustments to certain 2013 costs to reflect
2012 contractual and economic parameters (e.g. 2012 unit labor cost), and excluding SSW) and additional
savings of approximately A 55 million from 2013 to 2014 (based on an application of the 2013 cost basis to
2014 volumes, adjustments to certain 2014 costs to reflect 2013 contractual and economic parameters
(e.g. 2013 unit labor cost), and including SSW beginning as of January 24, 2014). As a result, our operating
loss has decreased and our Adjusted EBITDA has been relatively stable in the past three years—ranging
from a high of A 122.5 million in 2012 and a low of A 112.6 million in 2013 and increasing slightly in 2014
50
compared to 2013 to A 117.7 million—despite a low growth environment exacerbated by falling prices and
In the three months ended March 31, 2015, we recorded sales of A 238.7 million (no adjustments), a net
profit of A 1.9 million and EBITDA of A 40.1 million (no adjustments). In 2014, we recorded sales of
A 846.0 million (Adjusted Sales of A 853.4 million), a net loss of A 27.0 million and Adjusted EBITDA of
A 117.7 million. In 2013, we recorded sales of A 743.0 million (Adjusted Sales of A 875.5 million), a net loss
of A 109.3 million and Adjusted EBITDA of A 112.6 million. For the year ended December 31, 2012, we
recorded sales of A 868.0 million (Adjusted Sales of A 1,030.0 million), net loss of A 90.6 million and
Adjusted EBITDA of A 122.5 million.
B.
FACTORS AFFECTING
THE
COMPARABILITY
OF
OUR RESULTS
We believe that the factors discussed below have affected the comparability of the financial information for
the periods covered by the financial information presented in this prospectus and their comparability with
the results we will achieve in future periods.
Scope of Consolidation
We established SSW as a 50:50 joint venture with Samsung in 2006. As the next step in the development of
SSW, we decided, together with Samsung, to raise capital to repay the initial joint venture project
financing, under which approximately SG$ 340 million (A 196.7 million using exchange rates at the time of
repayment) remained outstanding as of December 31, 2013. This was done through a combination of debt
and equity funding from Samsung and us. As part of a capital increase, the Company’s wholly-owned
subsidiary Siltronic Holding International B.V. acquired 750 million new shares in SSW. This increased our
total share to 78 percent, giving us full operational control of SSW. We account for business combinations
using the acquisition method when control is transferred to the Group. In connection with the transaction,
we also made an additional loan to SSW and prepayments for wafers. Samsung also provided prepayments
to SSW. As of December 31, 2014, SSW had A 54.1 million in prepayments outstanding to Samsung. These
prepayments are applied towards a certain percentage of the purchase price payable for wafers from SSW
as they are delivered. The acquisition of the majority stake in SSW had a significant impact on both our
statement of financial position and our statement of profit and loss and thus makes it difficult to compare
our financial statements from 2014 with those from preceding periods. The following discussion is intended
to help you understand the differences in our financial statements in the most recent period from the
financial statements in prior years.
Our investment in SSW was accounted for using the equity method during the time we held a 50 percent
interest, i.e. through January 24, 2014. When accounting for an investment under the equity method, we
are required to record only our portion of the net income or loss attributable to our equity investment in
one single line item in the statement of profit and loss. As we held a 50 percent interest, we recorded
50 percent of the net loss of SSW in the line item ‘‘loss from investment in joint venture’’ and reflected our
investment in SSW in our statement of financial position by reducing the historical acquisition cost of
shares and shareholder loans classified as net investment related to SSW by the accumulated net losses of
SSW allocated to us for each financial period through January 24, 2014.
Once we agreed to increase our stake in SSW to 78 percent as described above, we began consolidating the
subsidiary with our Group results from January 24, 2014. This has greatly impacted our statements of profit
and loss and financial position. We eliminate intra-group transactions and show each type of SSW’s income
and expenses realized with non-Group companies in our Group’s respective line items in our statement of
profit and loss, i.e. sales, cost of sales, research and development cost, general administrative expense, etc.
Correspondingly in the statement of financial position, all assets and all liabilities existing between us and
SSW have been eliminated. To reflect the portion Samsung owns in the net assets of SSW, a
non-controlling interest representing Samsung’s ownership in SSW is reported as a component of equity in
our statement of financial position. We recorded goodwill of A 20.5 million in connection with the
consolidation.
The change in scope of consolidation affected the following line items in our statement of profit and loss in
the following ways:
Sales. SSW sells wafers to us and Samsung. Prior to the consolidation of SSW, the wafers we purchased
from SSW represented trade material because we sold those wafers to third-party customers; the
51
wafers SSW sold directly to Samsung were not included in the sales of our Group. After consolidating
SSW, we include all of SSW’s sales in the Group’s sales.
Cost of Goods Sold. Prior to consolidation, we included the purchase cost for wafers the Group
purchased from SSW in our cost of goods sold. After consolidation, we recorded SSW’s cost of
producing all its wafers in our cost of goods sold (personnel cost, raw materials and supplies,
depreciation and amortization, electricity, etc.).
Loss from investment in joint venture. Prior to consolidation, we recorded our share of SSW’s net loss
in this line item. Since all income and expenses of SSW is included in the individual line items of our
Group’s statement of profit and loss after consolidation, nothing is included in the line item ‘‘loss from
investment in joint venture’’ post consolidation.
Interest income and expense, net. Subsequent to the acquisition of control of SSW, some debt of SSW
was refinanced. In addition, the interest-bearing shareholder loans of our Group towards SSW have
been eliminated by corresponding shareholder-related financial liabilities recorded at SSW as part of
the consolidation.
Our Relationship with the Wacker group
As a German stock corporation, we currently have our own management and supervisory board. However,
we report as a business segment of Wacker Chemie AG, who, prior to the Offering, directly and indirectly
held all of our share capital. Consequently, our historical consolidated financial statements may not reflect
what our results of operations, financial position, equity or cash flows may be in the future as a standalone
public company. Differences may arise as a result of the following matters in particular. For additional
information on our relationship with our shareholders and information regarding the agreements with the
Wacker group discussed below, see ‘‘Part 15: Certain Relationships and Related Party Transactions—A.
Relationship with Wacker Chemie AG.’’
Centralized Support Functions and Other Services
Our consolidated financial statements, and particularly our costs of goods sold, include expenses for
certain support functions that have historically been provided by Wacker Chemie AG. These support
functions were provided pursuant to services agreements under which we outsourced to Wacker
Chemie AG a variety of services such as site services in Burghausen, electricity, media and waste
management in Burghausen, some of our IT (hosting, networks, clients and some applications), some
engineering services, non-core (sundry) purchasing, legal, tax, payroll, account payable and receivable and
treasury.
Following this Offering, Wacker Chemie AG will continue to provide us with the majority of the services
related to these functions pursuant to renewed services agreements. Under the terms of these services
agreements, many services (excluding, among other things, electricity) will carry a higher cost than they did
during 2014 when we received them at cost to the Wacker group. Additionally, we expect to incur other
costs to replace the services and resources that we will no longer purchase from Wacker Chemie AG,
particularly investor relations, internal audit, compliance, strategic planning and some HR functions,
among others. Thus the proportion of costs related to centralized support functions provided by Wacker
Chemie AG will decline, but our overall costs for support functions in general will increase as we incur
expenses typical for a listed company. For additional information on the services agreements and
additional support function costs, see ‘‘Part 15: Certain Relationships and Related Party Transactions—
A. Relationship with Wacker Chemie AG—Services Agreements’’ and ‘‘—Listed Company Expenses’’ below.
Employee Compensation
We made a one-time payment to Wacker Chemie AG of A 39 million (which we treated as a reduction in
capital reserves recorded on the statement of financial position for accounting purposes) in December
2014 in consideration for Wacker Chemie AG offering to permanently take over up to 500 employees of
Siltronic AG from 2014 to 2019. We plan to transfer employees to decrease our costs and put Siltronic AG
in a better position to avoid restructuring measures in the future. Although employees will keep their
pension plans, employee benefit plan costs for those employees who transfer to Wacker Chemie AG will no
longer be included in our results once they are employed by Wacker Chemie AG. If there are unfunded
pension obligations when an employee transfers, we will make one time payments to compensate Wacker
Chemie AG for the liability it assumes. In addition, our personnel costs will also not reflect these
52
employees, lowering the personnel cost portion of costs of goods sold. We would expect similar declines in
our personnel costs and costs for compensation for assumed pension liabilities to continue until the
expiration of the agreement at the end of 2019. As of December 31, 2014, 91 employees working at our
Burghausen or Munich sites have transferred from Siltronic AG to Wacker Chemie AG. For additional
information, see ‘‘Part 15: Certain Relationships and Related Party Transactions—A. Relationship with Wacker
Chemie AG—Labor Support Agreement.’’
Listed Company Expenses
As a result of this Offering and our Frankfurt Stock Exchange listing, we will become subject to ongoing
reporting requirements. In addition, we will be required to establish procedures and practices as a
standalone public company in order to comply with our obligations under related rules and regulations. As
a result, we will likely incur additional costs, including internal audit, investor relations and regulatory
compliance costs. These costs could be significant and have a material effect on our financial condition and
Profit and Loss Transfer Agreement
From January 1, 2009 through December 31, 2014, Siltronic AG was subject to a domination and profit and
loss transfer agreement (‘‘PLTA’’) with the Wacker group through Wacker Chemie AG’s wholly-owned
subsidiary Wacker-Chemie Dritte Venture GmbH, which was concluded for a minimum fixed term of five
years, see ‘‘Part 15: Certain Relationships and Related Party Transactions—A. Relationship with Wacker
Chemie AG—Domination and Profit and Loss Transfer Agreement.’’ In Germany, a parent and its subsidiary
can enter into a PLTA, obligating the subsidiary to transfer its annual GAAP profit to the parent, and
obligating the parent to compensate the subsidiary for any annual GAAP losses incurred during the term
of the agreement. This PLTA was (amongst others) a requirement for the Wacker group to create a fiscal
unity with us for German corporate income and trade tax purposes, allowing the Wacker group to use
Siltronic AG’s tax losses to offset taxable income. Due to the fiscal unity, Siltronic AG’s individual annual
net profit or loss for tax purposes (as it would have been calculated absent the PLTA) was attributed to the
Wacker group. Therefore, because of such fiscal unity, Siltronic AG has no net operating losses for
German income tax purposes that we will be able to use in the future to offset any taxable income. While
the PLTA was in effect, the Wacker group paid us cash in the first quarter of each year to compensate us
for losses Siltronic AG incurred in the previous year. These loss transfers amounted to A 108.3 million for
2013 and to A 116.0 million for 2014. In Germany, PLTAs are limited to companies incorporated in
Germany, thus PLTAs were not concluded with our subsidiaries in Japan, Singapore or the United States.
In December 2014 (and, therefore, after the expiration of the agreement’s fixed term), the parties to the
PLTA mutually agreed to terminate the PLTA as of the end of 2014. Beginning January 1, 2015, we are,
therefore, no longer subject to the PLTA. This will affect the comparability of our results following the
Offering, particularly with regards to our cash flows and financial liabilities towards the Wacker group, and
will potentially limit our ability to recover from future losses as we have done in the past. Please see
‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—We have previously reported as a business segment
of Wacker Chemie AG. Therefore, our prospects must be considered in light of the risks, expenses and
difficulties encountered by companies in the early stages of fully independent business operations, particularly
companies in highly competitive markets such as ours.’’
C.
KEY FACTORS AFFECTING OUR RESULTS
OF
OPERATIONS
AND
FINANCIAL CONDITION
We believe that the operating and accounting factors discussed below have contributed to the development
of our business, financial condition and results of operations.
Semiconductor Industry Volatility
Overall demand for semiconductors has grown over the past decade. According to the Semiconductor
Industry Association and World Semiconductor Trade Statistics, between 2004 and 2013, semiconductor
unit sales and the overall semiconductor market revenue grew at compound annual growth rates (CAGRs)
of 5.6 percent and 4.1 percent, respectively. Despite this long-term trend of increasing demand for
semiconductors, short-term demand for semiconductors and therefore semiconductor silicon wafers has
been subject to considerable volatility. Volatility occurs due to changes in the supply and demand for
semiconductor devices, which is impacted by general economic conditions, including consumer spending
levels, and also trends that change demand for mobile, storage, industrial, automotive and other
53
applications. For example, according to Gartner, worldwide demand for semiconductor silicon wafers
declined slightly in 2011 and 2012, and was stable in 2013, compared to each prior year. Including sales of
SSW, we recorded gains on a consolidated basis in wafer area in each of those years, increasing our market
share against this background of declining demand. In addition, we have seen some years that show greater
demand for our semiconductor silicon wafers in the second and third quarters of the year than in other
quarters, but this has not been the case for the most recent financial year. Despite the above-market
growth from 2011 to 2013, and occasional strong summer periods we have seen historically, we typically
expect our volumes to be consistent with general industry demand. See also ‘‘Part 1: Risk Factors—A. Risks
Relating to Our Business—Our business depends on the semiconductor device industry, the volatile and cyclical
nature of which can significantly change the utilization of production capacities for semiconductor silicon
wafers. These changes could materially adversely affect our net assets, financial condition and results of
operation.’’
Wafer Pricing Fluctuations
Based on historical selling prices, new wafer diameters typically sell for a premium per square inch in the
first few years of production compared to more mature diameters. Prices of wafers generally decline over
time, with the newest wafer generations declining even more significantly as they lose their initial premium.
In addition, consolidation within the semiconductor industry and overcapacity for suppliers of
semiconductor silicon wafers have increased the purchasing power of our customers, resulting in
downward pressure on wafer average selling prices. Despite this downward trend of silicon wafer average
selling prices over the long-term, we have in recent years experienced and continue to experience
significant short-term price volatility based on changes in the supply and demand for semiconductor
devices. For example, in 2013, Gartner reported that semiconductor silicon wafer average selling prices
worldwide decreased by approximately 14 percent as compared to prices in 2012, while average prices
increased by approximately five percent in 2011 as compared to prices in 2010. We believe the average
selling price increase in 2011 resulted primarily from a temporary supply gap. In contrast, the decrease in
2013 was primarily due to continued excess global manufacturing capacity for 300 mm wafers in
combination with a significantly weakened Japanese Yen which, we believe, gave our Japanese competitors
room for price reductions. These types of semiconductor silicon wafer price fluctuations can have a
significant impact on our sales and gross margins in a particular period. See also ‘‘Part 1: Risk Factors—
A. Risks Relating to Our Business—The average selling prices for each generation of semiconductor silicon
wafers have declined over time, and, against that longer-term trend, have also displayed significant short-term
price volatility in recent years. In addition, overcapacity in the silicon wafer industry and the continued strength
of device manufacturers’ bargaining power could force us to lower our prices. Any such price decline could
materially adversely affect our business, financial condition and results of operations.’’
Cost- and Efficiency-Improvement Initiatives
We have a strong track record of successful cost reduction and efficiency improvement initiatives. We
significantly reduced our unit costs in recent years by enhancing our production footprint and improving
strategic capacity management to meet demand efficiently. These initiatives have successfully helped to
maintain or improve margins despite further price declines and increased competition. We have
implemented multiple measures designed to rationalize our use of resources, optimize those resources for
the most attractive market opportunities and manage our production capacity to efficiently meet demand.
These measures include multiple, concurrent ongoing initiatives that are focused on continuing to reduce
the cost of our fixed and variable costs across our multinational manufacturing footprint.
With our restructuring activities in 2011 and 2012 (site closures and consolidations in Japan, the United
States and Germany) we aligned our capacities in smaller diameter and 200 mm wafers with current
market trends. As a result, our fixed costs decreased significantly and capacity utilization at our remaining
sites increased. Ongoing initiatives, such as those related to the services agreements or labor support
agreement with Wacker Chemie AG, address the reduction of our indirect staff and other fixed costs.
These initiatives have visible effects on our fixed cost position, as described below.
In addition, we have achieved substantial success in lowering our variable costs. Major progress has been
made with regard to our polysilicon cost by leveraging processing yields, polysilicon quality, and declining
market prices. We and SSW have agreed to long-term supply contracts with Wacker Chemie AG for
polysilicon through 2020 and 2019, respectively, which include price reductions for 2015. We place a special
focus on our supply cost, where a wide range of initiatives regarding consumption of materials and
supplies, process optimization, supplier selection and purchase price reduction have contributed to the
54
positive trend in a major cost item. The improvement in the cost of materials has also been accompanied
by the continued increase of both people- and asset-efficiency and has enabled us to raise the output of
existing facilities with an increasingly smaller number of direct staff.
Combined, these achievements have reduced the variable costs of our 300 mm operations in Germany in
total by over 40 percent since 2010 and at least ten percent each year since 2011. On a group level, our cost
reduction roadmap has led to total ongoing cost reductions (excluding one-time costs such as restructuring
expenses for site closures) of more than A 80 million from 2012 to 2013 (based on an application of the
2012 cost basis to 2013 volumes, adjustments to certain 2013 costs to reflect 2012 contractual and economic
parameters (e.g. 2012 unit labor cost), and excluding SSW) and additional savings of approximately
cost), and taking into account the cost savings of SSW from 2013 to 2014). Below is a chart illustrating our
cost reductions in 2013 and 2014 by approximate proportion per category:
Reduction in polysilicon cost
Reduction of electricity and supply cost
Productivity improvement (direct staff)
Reduction of indirect staff
Yield improvements
Site closures
2014
2013
19MAY201506260106
We expect to continue to enhance the efficiency and cost position of our wafer production through further
improvements in manufacturing and to follow our cost reduction roadmap as we integrate the recently
consolidated SSW operations.
Our cost reduction measures currently implemented and planned for 2015 and beyond include:
•
Polysilicon price reduction in 2015
•
Supply cost reduction by selection of new vendors, recycling initiatives and process changes
•
Automation of 300 mm lines in Germany and other measures to increase productivity
•
Continuous optimization of the polysilicon supply and usage
•
Czochralski crystal yield increases through investment in new, large crystal pullers and other measures
•
Reduction of staff through attrition, early retirement, voluntary leaves and transfers to Wacker
Chemie AG
•
Reduction of support functions
We expect that a successful continuation of our cost reduction roadmap will have a positive contribution on
both our operating result and EBITDA. We expect our capital discipline in recent years to further reduce
depreciation. As the level of our investment (capital expenditures) continues to be lower than our
depreciation charges, we expect our operating result to benefit. For risks associated with our cost- and
efficiency-improvement initiatives and our cost reduction roadmap, please see ‘‘Part 1: Risk Factors—
A. Risks Relating to Our Business—We have in the past and may in the future implement initiatives designed to
achieve cost reductions and to manage our production capacity to meet demand efficiently. We may fail to
realize the full benefits of, and could incur significant costs relating to, any such initiatives.’’
Manufacturing Capacity Utilization and Capital Expenditures
The semiconductor wafer industry is capital-intensive due to the investments in manufacturing capacity
needed to compete effectively. Our semiconductor silicon wafer manufacturing processes are highly
complex and need to be continuously improved in response to changing customer requirements, requiring
advanced and increasingly costly equipment as design rules and customer specifications move from one
55
generation to the next. Other capital investments are required to upgrade existing facilities and to improve
automation. As fixed costs are significant in the semiconductor silicon wafer industry, changes in our
manufacturing plant utilization and efficiency have a significant impact on our results of operations.
Therefore, we focus on maximizing our manufacturing capacity utilization throughout periods of
fluctuating demand for semiconductor silicon wafers. We continuously review our global manufacturing
footprint to manage our existing capacity in light of current industry conditions. Our manufacturing
processes are designed to be flexible and scalable with low to moderate additional capital investment
necessary to pursue new opportunities or increase capacity. This, in combination with our disciplined
capital allocation across technologies, capabilities, and equipment upgrades, allowed us to reduce capital
expenditures over recent years and allows for moderate ongoing capital expenditure levels.
We recorded adjusted capital expenditures taking SSW into consideration (see ‘‘Part 9: Selected
Consolidated Financial Data—B. Additional Financial Information and Key Performance Indicators—
Adjusted Capital Expenditures’’) of A 144.3 million in 2012, A 39.7 million in 2013, and A 40.6 million in 2014
with corresponding impacts on our cash flows and depreciation. However, we expect depreciation of our
assets to decline from about A 150 million in 2014 by about one-fifth in 2015 and to remain at about this
level in 2016, depending on exchange rate developments and excluding potential effects from impairments.
This decline is an effect of our tailored capital expenditures in recent years and increased capital discipline
which we plan to continue in the years to come. While we keep up selective investments in technology and
equipment to improve operational performance, we intend to maintain our capital discipline and consider
investing in capacity only when attractive return on investment is probable. See also ‘‘Part 1: Risk Factors—
We may not be able to match our production output to demand for our wafers, which could result in a shortage
or excess of manufacturing capacity. This could materially adversely affect our business, financial condition or
results of operations.’’
Foreign Currency Exchange Rates
The majority of our sales is generated in U.S. Dollars, and we generate a much smaller portion of sales in
Japanese Yen and Euro denominations. Our expenses, in contrast, are mostly denominated in Euro, with
significant portions in Singapore Dollar and U.S. Dollar. Due to the fact that sales and expenses are not
denominated in the same currency to a significant degree, our results of operations are impacted by
currency exchange fluctuations. The chart below shows a rough breakdown of our foreign exchange
exposure in relation to global sales and expenses in different currencies.
EUR
USD
SGD
JPY
Cost
Revenue
19MAY201505374061
Our most significant exposure to exchange rate fluctuations relates to the conversion to Euro of our U.S.
Dollar sales less our U.S. Dollar and Singapore Dollar expenses.
Sales:
•
In 2014, we converted our sales to Euro at an average exchange rate of 1.33 U.S. Dollar per Euro and
an average rate of 1.68 Singapore Dollar per Euro. During the first quarter of 2015, the U.S. Dollar
appreciated significantly, moving to below 1.10 U.S. Dollar per Euro by the end of March. If we had
converted sales for 2014 at an exchange rate equal to 1.10 U.S. Dollar per Euro (instead of 1.33 U.S.
Dollar per Euro), the change of the exchange rate would have resulted in an increase in sales of
approximately A 100 million (assuming all other factors remain unchanged).
•
On similar assumptions, we estimate that a change in the U.S. Dollar exchange rate by 1 cent from
1.10 to 1.11 U.S. Dollar per Euro on an annual basis would have resulted in an estimated decrease of
approximately A 6 million in sales while a change to 1.09 would have resulted in an estimated increase
of approximately A 6 million in sales.
EBITDA:
•
In 2014, we converted our sales and expenses to Euro with an average exchange rate of 1.33 U.S.
Dollar per Euro and 1.68 Singapore Dollar per Euro. If we had converted expenses for 2014 at
56
exchange rates equal to 1.10 U.S. Dollar per Euro and 1.50 Singapore Dollar per Euro, we estimate
the change of the exchange rates would have impacted EBITDA by approximately A 70 million
(disregarding any effects from hedging).
•
We estimate that a change in the U.S. Dollar exchange rate by 1 cent from 1.10 to 1.11 U.S. Dollar per
Euro and a flat 1.36 Singapore Dollar per U.S. Dollar exchange rate for the year 2014 would have had
negative impacts on EBITDA of approximately A 3 million (excluding effects from hedging). A change
of U.S. Dollar 0.01 in the other direction to 1.09 would have resulted in an estimated positive impact
of approximately A 3 million on EBITDA (excluding effects from hedging).
We record the effects from changes in foreign currency exchange rates in our statement of profit and loss
in other operating income and expense, respectively. To protect against reductions in value and volatility of
future cash flows caused by changes in U.S. Dollar and Japanese Yen exchange rates, we have established
transaction-based hedging programs using foreign currency hedging contracts. Even if we hedge our
foreign exchange rate risk effectively, our financial results may nonetheless be affected by foreign exchange
fluctuations as we aim to hedge only a portion of our U.S. Dollar (including Singapore Dollar) and
Japanese Yen exchange rate exposure for a limited time period.
Most of our hedging instruments now have a negative value which has not yet been recorded in our
statement of profit and loss because most instruments were entered into before the U.S. Dollar began its
rapid appreciation starting in the fourth quarter of 2014. In the first quarter of 2015, we recorded losses of
approximately A 19 million from our hedging instruments in our statement of profit and loss. Most of those
were offset by a total of A 16 million other foreign exchange effects in the first quarter of 2015 for example
due to the revaluation of accounts with new exchange rates. Such effects are due to the unusually rapid
change of exchange rates during the last months. In addition to the A 19 million loss from hedging
instruments recorded in the first quarter of 2015, if the exchange rate of the U.S. Dollar were to equal
1.10 U.S. Dollar and the Japanese Yen 130 through the remaining 9 months of 2015 and all of 2016, the
losses from our existing hedging instruments would equal approximately A 40 million in the remaining
9 months of 2015 and A 15 million in 2016. We do not yet own any hedging instruments that settle during
2017. A change in the U.S. Dollar exchange rate by 1 cent from 1.10 to 1.11 U.S. Dollar per Euro would
reduce these expected hedging losses by A 2 million for the remaining 9 months of 2015 from A 40 million
to A 38 million. A change in the U.S. Dollar exchange rate by 1 cent from 1.10 to 1.09 U.S. Dollar per Euro
would increase these expected hedging losses by A 2 million for the remaining 9 months of 2015 from
A 40 million to A 42 million. See also ‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—Exchange rate
fluctuations could significantly negatively affect our earnings and cash flow.’’
57
D.
RESULTS
OF
OPERATIONS
The following table provides an overview of our results of operations for the periods shown:
Three-month
period
ended March 31,
2015
2014(1)
2014(1)
2013
2012
(unaudited)
(audited)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.7
196.4
846.0
743.0
868.0
(199.1) (187.3) (769.4) (658.8) (786.9)
39.6
9.1
76.6
(8.5)
(16.2)
(4.2)
56.1
(58.5)
(7.5)
(15.9)
(4.2)
30.1
(9.0)
(30.5)
(64.3)
(16.0)
82.4
(61.8)
(28.7) (34.5)
(58.8) (66.8)
(13.9) (18.9)
45.4
83.1
(81.4) (101.4)
Operating profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
2.6
(13.6)
(53.2)
(57.4)
Loss from investment in joint venture(1) . . . . . . . . . . . . . . .
—
(3.5)
(3.5)
(42.5)
(26.6)
Operating profit/(loss) less loss from investment in joint
venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
(0.9)
(17.1)
(95.7)
(84.0)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0
(0.6)
(1.5)
0.6
(0.8)
(0.7)
0.6
(2.0)
(6.3)
6.4
(0.3)
(9.5)
5.9
(0.6)
(5.7)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.1)
(0.9)
(7.7)
(3.4)
(0.4)
Profit/(loss) before taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2
(1.8)
(24.8)
(99.1)
(84.4)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4.3)
(1.2)
(2.2)
(10.2)
(6.2)
Net profit/(loss) for the period . . . . . . . . . . . . . . . . . . . . .
1.9
(3.0)
(27.0) (109.3)
(90.6)
3.2
(1.3)
(0.7)
(2.3)
(16.0) (109.3)
(11.0)
—
(90.6)
—
0.06
(0.01)
(0.32)
(1.81)
Selling expenses . . . . . . . . . . . . . . .
Research and development expenses
General administration expenses . . .
Other operating income . . . . . . . . .
Other operating expenses . . . . . . . .
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Of which attributable to Siltronic AG shareholders . . . . . . .
Of which attributable non-controlling interest . . . . . . . . . . .
Profit/(loss) per common share in Euro (basic / diluted)(2) .
84.2
(2.19)
81.1
(1)
The result from investment in joint venture represents the Group’s share of the net income in SSW until SSW was consolidated
with the Group beginning January 24, 2014.
(2)
Net loss attributable to Siltronic AG shareholders for the period divided by 50,000,000 shares (average number of shares
outstanding in all periods shown). On May 11, 2015, the Company registered new articles of association adopted in the ordinary
shareholders’ meeting on May 7, 2015. As a result, immediately prior to the issuance of the New Shares the Company has
25,000,000 registered shares outstanding.
Sales
We generate sales primarily through the manufacture and sale of semiconductor silicon wafers, generally
manufactured to meet very precise specifications of our customers. We also sell a limited amount of
intermediate products (so-called ingots) and scrap wafers. Sales from rendering services or licenses are
minor. We measure our sales by wafer area, or more specifically, square centimeters (cm2) sold. Our
overall sales are generally impacted by the following factors, among others:
•
fluctuations in overall economic activity within the geographic markets in which we operate;
•
the effect of changes in production capacity within the semiconductor silicon wafer industry on
demand;
•
changes in semiconductor silicon wafer average selling prices;
•
the number of semiconductors used within existing applications and the development of new
applications requiring semiconductors;
58
•
the ‘‘mix’’ of products sold;
•
changes in the level of competition faced by our products, including the launch of new products by
competitors;
•
our ability to successfully develop and launch new products and applications; and
•
variations in exchange rates.
Sales to our customers are generally governed by purchase orders in connection with mainly short-term
framework agreements that contain various terms such as technical specifications, estimated quantity
requirements or pricing. Approximately one-third of our agreements have a term of three months or less,
about another third have terms between three months and one year and roughly one-third have a term of
one year or longer in some instances. A significant portion of these longer term contracts includes price
resets during the contract period or reference market prices. We also sell wafers to certain customers
under consignment arrangements. These consignment arrangements usually require us to maintain a
certain quantity of wafers in inventory at the customer’s warehouse.
We recognize revenue for product sales when title transfers, the risks and rewards of ownership have been
transferred to the customer and collection of the related receivable is reasonably assured. For
non-consignment orders, the requirements to record revenue are usually met at the time of shipment. In
the case of consignment orders, title passes when the customer pulls the product from the warehouse or, if
the customer does not pull the product within a contractually stated period of time (generally 30-90 days),
at the end of that period, or when the customer otherwise agrees to take title to the product.
Comparison of three-month periods ended March 31, 2015 and March 31, 2014
Sales increased by A 42.3 million, or 21.5 percent, to A 238.7 million in the period ended March 31, 2015
from A 196.4 million in the period ended March 31, 2014. Sales increased (i) partly due to the fact that
SSW was consolidated for the entire three months of the first quarter of 2015 whereas in the first quarter
of 2014, SSW was first consolidated only on January 24th, (ii) partly because of a larger wafer area
(volume) sold independent from the consolidation of SSW and (iii) partly because of increased prices after
conversion to Euro due to a stronger U.S. Dollar in the first three months of 2015 compared to the first
three months of 2014.
Comparison of financial years ended December 31, 2014 and December 31, 2013
Sales increased by A 103.0 million, or 13.9 percent, to A 846.0 million in the year ended December 31, 2014
from A 743.0 million in the year ended December 31, 2013. The year-on-year increase in sales was due to a
large extent from the consolidation of SSW and by a large increase in wafer area (volume). Wafer area
would have increased by almost 11 percent, however, even if SSW had not been consolidated in our results.
The increase in sales resulting from the volume increase was offset by lower average prices for wafers and
adverse currency developments of the Japanese Yen. We estimate that the consolidation of SSW resulted
in approximately A 100 million in sales that otherwise would not have been included in our results if SSW
would have been accounted for at equity. Please see ‘‘—B. Factors Affecting the Comparability of Our
Results—Scope of Consolidation.’’
Our sales decreased by A 125.0 million, or 14.4 percent, to A 743.0 million in the year ended December 31,
2013 from A 868.0 million in the year ended December 31, 2012. The largest portion of the decrease was
due to lower average selling prices and a negative development of foreign exchange rates in 2013. In
addition, we ceased production at our manufacturing site in Hikari at the end of March 2012 and closed
one production facility in Portland, Oregon, in August 2012. We transferred the production of some, but
not all wafer specifications to other production facilities, which contributed to lower sales.
Cost of goods sold
The cost of goods sold include (i) cost for raw materials and supplies, (ii) personnel cost, (iii) depreciation,
(iv) wafers purchased for trade purposes—prior to its consolidation, we purchased wafers from SSW and
sold them to end customers—(v) electricity, gas, water and steam and (vi) other costs as far as related to
the area of manufacturing.
59
The cost for raw materials and supplies is primarily attributable to a number of factors, including the
purchase cost for polysilicon, parts consisting of quartz and graphite, packaging material, supplies for
sawing and polishing and spare parts for maintenance or repair. Polysilicon is primarily purchased from
our shareholder Wacker Chemie AG.
Personnel cost consists of salaries for the employees who work in the manufacturing area, charges for
social security for our employees and cost for pensions. We also incur costs for temporary workers we hire,
which we do not include as part of our personnel cost. The temporary workforce helps us to cope with
periods of high demand (in the past, our market showed significant volatility resulting in periods with very
high demand followed by periods of low demand) and to allow us to avoid unnecessary labor costs when
capacity loads are reduced. During 2014, we employed an average of 339 (full-time equivalent) temporary
workers.
Depreciation charges represent the reduction in value of plant and equipment used in the manufacturing
process. Depreciation is calculated on a straight-line method based on estimated useful lives. We apply
uniform useful lives in group financials and such lives are not based on tax rules.
The main items included in the other cost of goods sold reflect service cost related to infrastructure, repair
and maintenance, engineering activities, IT services related to manufacturing systems and cost for
temporary workers.
We expect to incur additional costs as a result of becoming a public company. In addition, because many of
the items recorded under costs of goods sold are purchased through renewed services agreements with
Wacker Chemie AG, these costs are expected to rise slightly as we had previously received some of these
services at cost to Wacker Chemie AG. Following the Offering, we expect to pay slightly higher prices on
some of these services. However, we expect the increase to cost of goods sold and general administrative
expenses under these agreements will be immaterial as we estimate them, in the aggregate, to represent
less than half of 1 percent of our costs of goods sold in 2014.
Cost of goods sold increased in the first quarter 2014 from A 187.3 million by A 11.8 million, or 6.3 percent
to A 199.1 million. This increase is mainly related to higher sales volumes and greater costs for depreciation
and amortization of property, plant and equipment related to the consolidation of SSW.
Our cost of goods sold increased in the year ended December 31, 2014 by A 110.6 million, or 16.8 percent,
to A 769.4 million from A 658.8 million in the year ended December 31, 2013. This increase is mainly
related to the consolidation of SSW. Out of the A 110.6 million increase, A 70.3 million relates to
depreciation and amortization of property, plant and equipment of SSW. If SSW had still been accounted
for at equity for all of 2014, costs of goods sold would have decreased by A 29.4 million, or 4.4 percent,
while the amount of wafer area sold increased by almost 11 percent over the same period. This is due to
our cost reduction program under which we seek to reduce variable costs of producing our 300 mm wafers
by ten percent each year. We estimate the consolidation of SSW increased our cost of goods sold by
roughly A 135 million that would have otherwise not been included in our results if SSW were accounted
for at equity. Please see ‘‘—B. Factors Affecting the Comparability of Our Results—Scope of Consolidation.’’
Our cost of goods sold decreased by A 128.1 million, or 16.3 percent, to A 658.8 million in the year ended
December 31, 2013 from A 786.9 million in the year ended December 31, 2012. Over the same period,
wafer area sold was materially unchanged. The lower cost of goods sold was primarily driven by cost
improvements, through which we primarily reduced personnel cost and expenses for raw material. Through
our cost reduction roadmap, we were able to reduce approximately A 80 million in costs (based on an
application of the 2012 cost basis to 2013 volumes, adjustments to certain 2013 costs to reflect 2012
contractual and economic parameters (e.g. 2012 unit labor cost), and excluding SSW) the vast majority of
which relate to cost of goods sold. The total decrease of A 128.1 million between periods was affected not
only by these cost reductions, which include substantially lower fixed costs due to the consolidation of our
smaller diameter production from Portland, USA, to Burghausen, Germany in the third quarter of 2012
and the closure of our manufacturing facility in Hikari, Japan at the end of March 2012, but also by lower
depreciation.
60
Gross profit
Gross profit is the sum of sales less our costs of goods sold.
Gross profit increased sharply in the first quarter of 2015 compared to the respective period in 2014. In the
first quarter of the previous year, gross profit was A 9.1 million whereas in the first three months of 2015,
gross profit amounted to A 39.6 million representing an increase of A 30.5 million, or 335 percent. As a
percentage of sales, our gross profit margin improved from 4.6 percent to 16.6 percent. The change was
mainly triggered by our cost reduction program and increased margins due to a majority of our sales being
pinned to a stronger U.S. Dollar while our expenses are distributed across other currencies. Gross profit
margin for the first quarter of 2014 was affected by the first time consolidation of SSW, which, prior to
consolidation, had not benefitted as greatly from our cost reduction programs and had higher costs of
goods as a percentage of its sales.
Our gross profit decreased in the year ended December 31, 2014 by A 7.6 million, or 9.0 percent, to
A 76.6 million from A 84.2 million in the year ended December 31, 2013. As a percentage of sales, our gross
profit margin decreased from 11.3 percent to 9.1 percent for the years ended December 31, 2013 and 2014,
respectively. The change was triggered by the consolidation of SSW which had not benefitted as greatly
from our cost reduction programs and thus had a higher costs of goods as a percentage of its sales. We
estimate that the consolidation of SSW negatively impacted our gross profit by approximately A 30 million.
Our gross profit increased by A 3.1 million, or 3.8 percent, to A 84.2 million in the year ended December 31,
2013 from A 81.1 million in the year ended December 31, 2012, despite the 14.4 percent lower sales base.
Although we had significantly lower sales in 2013, our gross profit increased from 9.3 percent to
11.3 percent for the years ended December 31, 2012 and 2013, respectively.
Selling expenses
Our selling expenses consist of costs incurred by our organization responsible for marketing activities, for
sales activities (including commissions) and for application support. Overall, the main cost component of
selling expenses are personnel costs for our marketing and sales force.
We recorded selling expenses of A 8.5 million in the first three months of 2015 versus A 7.5 million in the
same period of 2014. This represents an increase of A 1.0 million or 13.3 percent. This was primarily due to
an increase in wafer area of 15.8 percent. Selling expenses as a percentage of sales fell from 3.8 percent to
3.6 percent.
We recorded selling expenses of A 30.5 million in the year ended December 31, 2014, an increase from
A 28.7 million in the year ended December 31, 2013, primarily due to increased commissions for higher
volumes sold. The consolidation of SSW has no impact on the selling expenses because SSW has no sales
and marketing activity of its own.
Our selling expenses decreased by A 5.8 million, or 16.8 percent, to A 28.7 million in the year ended
December 31, 2013 from A 34.5 million in the year ended December 31, 2012, primarily attributable to
lower personnel cost for sales activities.
Research and development expenses (R&D)
R&D costs comprise personnel expenses referring to employees working on aligning our technology with
our customers’ actual and expected future technical needs and specifications. In addition to personnel cost,
61
third-party technology costs and depreciation for fixed assets used in the area of R&D are included in
R&D costs.
The level of R&D expense is related to the number of ongoing development projects, the stage of
development process, the complexity of the underlying technology and the effort needed to assure that the
requested quality is achieved, but has historically represented roughly eight percent of annual sales.
Research costs are recognized as expenses when they are incurred, i.e. are not capitalized.
In addition with research and development of design rules, other current R&D projects include GaN-on-Si
for power and optoelectronics, the strained silicon DECISIF project (Device and Circuit Performance
Boosted Through Silicon Material Fabrication) and enabling power technologies on 300 mm wafers.
Cost for research and development expenses increased by A 0.3 million or 1.9 percent from A 15.9 million in
the first three months of 2014 to A 16.2 million in the first three months of 2015. The slight increase was
due to a stronger Singapore Dollar and U.S. Dollar compared to the Euro. As a percentage of sales, R&D
cost decreased from 8.1 percent to 6.8 percent.
Our research and development expenses increased A 5.5 million, or 9.4 percent, to A 64.3 million in the
year ended December 31, 2014 from A 58.8 million in the year ended December 31, 2013 nearly entirely
due to the consolidation of SSW. Expenses for R&D were 7.6 percent of our total sales in the year ended
December 31, 2014 versus 7.9 percent in the prior year. The declining percentage of sales results from
disproportionally lower R&D expense at SSW.
R&D cost decreased by A 8.0 million, or 12.0 percent, to A 58.8 million in the year ended December 31,
2013 from A 66.8 million in the year ended December 31, 2012. The decrease in research and development
expenses for the year ended December 31, 2013 compared to year ended December 31, 2012 was due to
lower personnel cost and the halt of production in Hikari/Japan and our closure of one production facility
in Portland, Oregon, where we had some R&D activities. R&D cost represented 7.9 percent of sales in
2013 based on the lower sales basis versus 7.7 percent in 2012.
General administrative expenses
General administrative expenses include personnel cost for central departments like human resources,
finance and information technology, unless they have been charged as an internal service to other cost
centers and thus to cost of goods sold, selling expenses or R&D.
General administrative expenses amounted to A 4.2 million in both the first three months of 2014 and the
corresponding period in 2015. As a percentage of sales, general administrative expenses decreased from
2.1 percent to 1.8 percent.
Our general administrative expenses increased from A 13.9 million in the year ended December 31, 2013 to
A 16.0 million in the year ended December 31, 2014 because of the consolidation of SSW. Had SSW not
been consolidated in our 2014 results, our general administrative expenses would have been A 14.5 million,
slightly above the prior year figure. As a percentage of sales, costs for administration equaled 1.9 percent
in both 2014 and 2013 as both sales and general administrative expenses increased in 2014.
Our general administrative expenses decreased by A 5.0 million, or 26.5 percent, to A 13.9 million in the
year ended December 31, 2013 from A 18.9 million in the year ended December 31, 2012. This positive
development was mainly due to lower personnel cost and to a minor part related to the closure of the
production site in Hikari, Japan, at the end of March 2012. Cost for administration as a percentage of sales
62
decreased from 2.2 percent in 2012 to 1.9 percent in 2013, as the decrease in general administrative
expenses in 2013 was proportionately greater than the decrease in sales.
Other operating income
Other operating income consists of income from foreign exchange, gains from remeasurements in
connection with the consolidation of SSW, government grants for research, reversals of provisions or
liabilities or bad debt allowances and income from the reversal of accrued personnel cost related to
restructuring. Profits from currency exchange rates comprise cash inflows that exceed the book values of
trade receivables denominated in foreign currencies, cash outflows that are lower than the book values of
trade liabilities denominated in foreign currencies and income resulting from financial instruments as far
as hedge accounting is not applied. To a large degree, profits from currency exchange correspond with
losses from currency exchange rates as discussed in ‘‘—Other operating expenses’’ below.
The following table sets forth the major components of our other operating income for the three months
ended March 31, 2015 and 2014 and the years ended December 31, 2014, 2013 and 2012.
Three-month
period ended
Year ended
March 31,
December 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
(audited)
Profits from currency exchange rates (including hedging activities)
Income from remeasurement of assets in the acquisition of SSW .
Income from reversal of provisions and valuation allowances for
receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from the disposal of property, plant and equipment . . . . .
Income from reversal of provisions related to restructuring . . . . .
Miscellaneous other operating income . . . . . . . . . . . . . . . . . . . .
...
...
54.4
0.0
25.1
3.5
74.0
3.5
35.5
0.0
61.4
0.0
.
.
.
.
0.3
0.0
0.0
1.4
0.6
0.1
0.0
0.8
0.7
0.3
1.6
2.3
4.1
0.4
0.6
4.8
7.1
4.2
3.0
7.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56.1
30.1
82.4
45.4
83.1
.
.
.
.
.
.
.
.
Other operating income increased from A 30.1 million in the three-month period ended March 31, 2014 to
A 56.1 million in the three-month period ended March 31, 2015, primarily due to the appreciation of the
U.S. Dollar against the Euro, which led to substantial gains on trade receivables relating to U.S. Dollardenominated sales. The profits from currency exchange rates in the first three months of 2014 include
A 17.6 million in connection with the acquisition of SSW due to the recognition of foreign currency
exchange profits which had previously been recorded in other comprehensive income. Additional
A 3.5 million result from the remeasurement of our previous investment in SSW.
Other operating income increased from A 45.4 million in the year ended December 31, 2013 to
A 82.4 million in the year ended December 31, 2014, primarily due to overall appreciation of the U.S.
Dollar against the Euro, which led to substantial gains on trade receivables relating to U.S. Dollardenominated sales. In addition, the profits from currency exchange rates in 2014 include both
A 17.6 million in connection with the acquisition of SSW due to the recognition of foreign currency
exchange profits which had previously been recorded in other comprehensive income. Additional
A 3.5 million result from the remeasurement of our previous investment in SSW.
The decrease of other operating income from A 83.1 million in 2012 to A 45.4 million in 2013 was due
primarily to lower profit from currency exchange rates as the U.S. Dollar depreciated against the Euro
over the course of 2013.
Other operating expenses
Other operating expenses reflect costs from foreign exchange losses including losses from hedging
activities, bad debt allowances, impairment, restructuring costs (cessation of production lines, site closure
63
or reorganization of departments), wind-down costs and other sundry expenses. Losses from currency
exchange rates comprise the negative differences between receivables and liabilities respectively paid in
foreign currency compared to the corresponding book values and expense resulting from financial
instruments as far as hedge accounting is not applied.
The following table sets forth the major components of our other operating expenses for the three months
ended March 31, 2015 and 2014 and for the years ended December 31, 2014, 2013 and 2012.
Three-month
period ended
March 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
(audited)
Losses from currency exchange rates (including hedging activities)
Impairment of property, plant and equipment . . . . . . . . . . . . . . .
Losses from valuation allowances for receivables . . . . . . . . . . . . .
Personnel cost related to restructuring . . . . . . . . . . . . . . . . . . . .
Wind-down cost in Hikari and Portland . . . . . . . . . . . . . . . . . . .
Miscellaneous other operating expenses . . . . . . . . . . . . . . . . . . .
(56.6)
(0.0)
(0.1)
(0.0)
(0.0)
(1.8)
(8.6) (49.1) (34.2)
(0.0) (8.9) (34.8)
(0.0) (0.4) (1.1)
(0.0) (0.2) (2.8)
(0.0) (0.0) (1.7)
(0.4) (3.2) (6.8)
(58.7)
(2.5)
(6.6)
(11.6)
(7.8)
(14.2)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(58.5) (9.0) (61.8) (81.4) (101.4)
Other operating expenses increased from A 9.0 million in the three months ended March 31, 2014 to
A 58.5 million in the three months ended March 31, 2015 predominantly due to greater losses from
currency exchange rates.
Other operating expenses decreased from A 81.4 million in the year ended December 31, 2013 to
A 61.8 million in the year ended December 31, 2014, primarily due to lower impairment charges for
property, plant and equipment which are partially offset by higher losses from foreign currency
transactions.
Other operating expenses decreased from A 101.4 million in the year ended December 31, 2012 to
A 81.4 million in 2013. The decrease was mainly due to a large decrease in losses from currency exchange
rates. There were also decreases in losses from valuation allowances for receivables, personnel costs
related to restructuring and wind-down cost in Hikari and Portland, but these were offset by higher
impairment charges. An impairment charge of A 22.3 million in 2013 relates to a vacant building in
Freiberg, Germany which we do not intend to use. Management also determined that future cash flows of a
certain wafer specification are expected to be negative and the machinery and equipment associated with
that wafer production line has been impaired in an amount of A 12.5 million.
Operating profit/(loss)
Operating profit/(loss) is the sum of our gross profit and other operating income less costs for selling
expenses, research and development expenses, general administration expenses and other operating
expenses.
Our operating profit amounted to A 8.3 million, or 3.5 percent of sales in the first quarter 2015 and
A 2.6 million, or 1.3 percent in the first quarter of the previous year. The improvement in gross profit of
A 30.5 million was mainly driven by the higher sales volumes and improved margins outlined above.
Our operating loss decreased by A 39.6 million, or 74.4 percent, to A 13.6 million in the year ended
December 31, 2014 from A 53.2 million in the year ended December 31, 2013. This decrease was due to the
changes in other operating income and other operating expenses outlined above.
64
In the year ended December 31, 2013, our operating loss decreased slightly by A 4.2 million, or 7.3 percent,
to A 53.2 million from A 57.4 million in the year ended December 31, 2012. The main drivers for this
decrease in operating loss were not related to gross profit. Instead, cost reductions totaling A 18.1 million
occurred in the areas of selling, R&D and administration contributed to the smaller loss. In addition, other
operating expenses decreased by A 20.0 million as a result of lower personnel-related restructuring cost
(reduction of A 8.8 million), declining cost for recording valuation allowances for trade receivables
(reduction of A 5.5 million) and lower cost for wind-down expenses in Hikari and Portland (A 6.1 million).
However, despite these decreases, impairment charges increased by A 32.3 million, almost completely
offsetting the aggregate decrease attributable to the aforementioned items.
Loss from investment in joint venture
Prior to January 24, 2014, our investment in SSW was accounted for using the equity method. Under the
equity method, accounting standards require that a shareholder records only its portion of the net income
of each equity investment in one single line item in the statement of profit and loss. Thus, the result from
investment in joint venture contains our share of the net result of SSW prior to January 24, 2014.
No loss from investment in joint venture was recorded in the first three months of 2015 because SSW was
fully consolidated in this period. In the first quarter of 2014, we consolidated SSW with effect as of
January 24, 2014. Prior to its consolidation, a loss of A 3.5 million was reflected for January 2014 according
to the equity method of accounting.
In the year ended December 31, 2014, SSW was reflected according to the equity method for less than one
month (January) since we consolidated SSW with effect as of January 24, 2014. In the year ended
December 31, 2013 however, SSW was accounted for using the equity method for the entire year. The net
loss of SSW attributable to the Group was A 42.5 million in the period from January 1, 2013 to
December 31, 2013 and A 3.5 million in January 2014.
Our loss from SSW increased by A 15.9 million, or 59.8 percent, to A 42.5 million in the year ended
December 31, 2013 from A 26.6 million in the year ended December 31, 2012. The higher loss of SSW was
caused by lower wafer prices in 2013 which could only partly be offset by a reduction in cost of sales.
Operating profit/(loss) less loss from investment in joint venture
Our operating profit less loss from investment in joint venture amounted to A 8.3 million in the first three
months of 2015 compared to an operating profit less loss from investment in joint venture of negative
A 0.9 million in the first three months of 2014. This increase was partly due to the consolidation of SSW
over the entire period and partly due to an increased gross margin as a result of the stronger U.S. Dollar.
Our operating loss less loss from investment in joint venture remained negative, but improved by
A 78.6 million, or 82.1 percent, to negative A 17.1 million in the year ended December 31, 2014 from
negative A 95.7 million in the year ended December 31, 2013. This increase was partly due to the
consolidation of SSW and partly due to the changes in other operating income and expenses, particularly
related to currency gains.
Our operating loss less loss from investment in joint venture increased by A 11.7 million, or 13.9 percent, to
negative A 95.7 million in the year ended December 31, 2013 from negative A 84.0 million in the year ended
December 31, 2012. The increase of the operating loss in 2013 mainly resulted from the higher net loss of
SSW which was reflected using the equity method.
65
Interest income
Interest income consists of interest income earned on cash, cash equivalents and intercompany loans to
Wacker Chemie AG and, prior to its consolidation, SSW.
Interest income decreased by A 0.6 million in the first quarter of 2014 compared to A 0.0 million in the first
quarter of 2015. The drop was due to the consolidation of SSW over the entire period. In the course of the
consolidation the interest-bearing shareholder loans of the Group to SSW were netted with the
corresponding shareholder-related financial liabilities recorded at SSW.
Interest income decreased by A 5.8 million from A 6.4 million in the year ended December 31, 2013 to
A 0.6 million in the year ended December 31, 2014. The drop was due to the consolidation of SSW. In the
course of the consolidation the interest-bearing shareholder loans of the Group to SSW were netted with
the corresponding shareholder-related financial liabilities recorded at SSW.
Our net interest income increased by A 0.5 million, or 8.5 percent, to A 6.4 million in the year ended
December 31, 2013 from A 5.9 million in the year ended December 31, 2012. This change was primarily due
to an increase in interest-bearing shareholder loans to SSW. Interest income related to the loans to SSW
was non-cash (i.e. capitalized).
Interest expenses
Interest expenses result almost entirely from intercompany loans provided by Wacker Chemie AG and by a
shareholder loan Samsung granted to SSW.
Interest expenses decreased marginally by A 0.2 million from A 0.8 million in the first quarter of 2014 to
A 0.6 million in the first quarter of 2015.
Interest expenses increased by A 1.7 million to A 2.0 million in the year ended December 31, 2014 from
A 0.3 million in the year ended December 31, 2013. The increase was due to the consolidation of SSW’s
interest-bearing debt to Samsung resulting from a shareholder loan.
Our net interest expenses decreased by A 0.3 million, to A 0.3 million in the year ended December 31, 2013
from A 0.6 million in the year ended December 31, 2012. This change was primarily due to slightly lower
cost for factoring.
Other financial result
Other financial result consists of interest related to pension provisions and other financial income and
financial expenses, such as the effects from changes in foreign currency exchange rates on loans in foreign
currencies.
66
The following table sets forth the major components of our other financial result for the three months
ended March 31, 2015 and 2014 and the years ended December 31, 2014, 2013 and 2012.
Three-month
period ended
Year ended
March 31,
December 31,
2015
2014
2014
2013
2012
(in E millions)
(unaudited)
(audited)
Interest from provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial income and expense, net . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.0)
0.5
(1.5)
(1.7) (7.5) (7.9) (6.5)
1.0
1.2 (1.6) 0.8
(0.7) (6.3) (9.5) (5.7)
Other financial result decreased in the first quarter of 2015 by A 0.8 million compared to the first quarter of
2014 from negative A 0.7 million to negative A 1.5 million. The largest contributor to this change was a
higher interest cost for pensions.
Other financial result improved by A 3.2 million from negative A 9.5 million to negative A 6.3 million in the
year ended December 31, 2014 compared to the year ended December 31, 2013. The change was primarily
due to foreign currency effects.
Other financial result decreased by A 3.8 million to negative A 9.5 million in the year ended December 31,
2013 from negative A 5.7 million in the year ended December 31, 2012. This change was primarily due to
currency losses resulting from the shareholder loans to SSW.
Financial result
Financial result is the sum of our interest income, interest expenses and other financial result.
Total financial result decreased by A 1.2 million to negative A 2.1 million in the first three months 2015 from
negative A 0.9 million in the first quarter of 2014. This decrease was primarily due to the consolidation of
SSW throughout the entire period.
Total financial result decreased by A 4.3 million to negative A 7.7 million in the year ended December 31,
2014 from negative A 3.4 million in the year ended December 31, 2013. This decrease was primarily due to
the consolidation of SSW.
Our total financial result decreased by A 3.0 million to negative A 3.4 million in the year ended
December 31, 2013 from negative A 0.4 million in the year ended December 31, 2012. This change was
primarily due to currency losses resulting from the shareholder loans to SSW which are denominated in
Singapore Dollars. Due to the negative development of the Singapore Dollar against the Euro, the value of
the loan to SSW expressed in Euro went down.
Income taxes
Income taxes include effective and deferred taxes. Effective taxes are calculated on the basis of applicable
tax rates in each individual country. Deferred tax assets and liabilities are recognized for temporary
differences between the carrying amount of assets and liabilities in the statement of financial position and
the amount attributed to these assets or liabilities for tax purposes. The deferred taxes account for taxable
or deductible amounts in future periods when the carrying amount of the asset or liability in the statement
of financial position is recovered or settled.
67
The deferred tax assets also include tax relief entitlements resulting from the anticipated use of existing
loss carry-forwards in future years (if it is probable that taxable profit will be available, against which the
deductible temporary differences can be utilized). Deferred taxes have to be accounted for separately from
the actual tax claims and liabilities. They are determined on the basis of the tax rates which are expected to
apply in each individual country in the tax period when the asset is realized or the liability is settled. The
deferred tax assets and liabilities are netted out in the statement of financial position only to the extent
possible (e.g. only if the deferred tax amounts are levied by the same tax authority). In cases where profits
or losses are recognized directly in equity, the deferred tax asset or liability is likewise posted under other
equity items.
Siltronic AG was subject to a fiscal unity with the Wacker group in Germany from 2009 through the end of
2014 for German corporate income and trade tax purposes because of the PLTA which had been in place
with the Wacker group (see ‘‘—B. Factors Affecting the Comparability of Our Results—Our Relationship with
the Wacker group—Profit and Loss Transfer Agreement’’). Due to this fiscal unity, our taxable loss was
allocated to the Wacker group during that period. Siltronic AG was, to this extent, not a standalone taxable
entity. The PLTA was dissolved at the end of the 2014 fiscal year. Effective January 1, 2015, Siltronic AG
will be subject to taxation in Germany as a standalone taxable entity and will be required to file individual
tax returns.
As of December 31, 2014, the German statutory corporate tax rate (combined rate of German income tax
and German trade tax) which Siltronic AG would have been subject to was 28.2 percent. Tax loss carry
forwards from Japan have not been recorded as deferred tax assets. Because of the PLTA, income taxes
recorded during 2012, 2013 and 2014 only relate to our subsidiaries outside of Germany.
The corporate income tax rate for our subsidiary in the United States is 35 percent and for our subsidiaries
in Singapore generally 17 percent. However, Siltronic Singapore Pte. Ltd. enjoys a ten percent concession
tax rate until 2016 for certain qualifying income due to government incentives of certain extension projects.
SSW enjoys a pioneer status until 2024 (under which no income tax is applicable to this entity, nor is it
eligible for a tax loss carry-forward during this period).
Income tax expenses increased by A 3.1 million from A 1.2 million in the period ended March 31, 2014 to
A 4.3 million in the period ended March 31, 2015. The increase was mainly due to effective taxes resulting
from higher taxable profits in Singapore and the United States.
Income tax expenses decreased by A 8.0 million from A 10.2 million in the year ended December 31, 2013 to
A 2.2 million in the year ended December 31, 2014. This decrease was mainly due to a release of valuation
allowances on deferred tax assets at the end of the 2014 fiscal year. We released these assets after
recognizing the higher profitability of our subsidiary in the United States.
Income tax expenses increased by A 4.0 million to A 10.2 million in the year ended December 31, 2013 from
A 6.2 million in the year ended December 31, 2012. This increase was primarily because of the consumption
of deferred taxes resulting from the closure of the production site in Hikari/Japan.
Net profit/(loss) (result for the period)
In the first quarter 2015 we realized a net profit of A 1.9 million whereas in the first quarter of 2014, we
recorded a net loss of A 3.0 million. The increase in net result was driven by the improvement of operating
profit/(loss) less loss from investment in joint venture.
Our net loss decreased by A 82.3 million, or 75.3 percent, to A 27.0 million in the year ended December 31,
2014 from A 109.3 million in the year ended December 31, 2013. This decrease in loss was due to the
consolidation of SSW and positive changes in other operating income and expenses.
68
Our net loss increased by A 18.7 million, or 20.6 percent, to A 109.3 million in the year ended December 31,
2013 from A 90.6 million in the year ended December 31, 2012. The decrease in 2013 mainly resulted from
the higher net loss of SSW (largely attributable to depreciation and lower selling prices) which is reflected
in our loss from investment in joint venture using the equity method.
Non-controlling result
Net loss attributable to non-controlling interests for 2014 was a loss of A 11.0 million. The non-controlling
interest refers to Samsung’s portion of the net loss of SSW, which was consolidated with our Group’s
results in 2014. There was no non-controlling result in 2013 or 2012 because SSW was accounted for at
equity during those periods.
E.
SELECTED DATA
FROM THE
STATEMENT
OF
FINANCIAL POSITION
The following table presents selected data from the major positions of our consolidated statement of
financial position for the periods indicated.
As of March 31,
2015
(unaudited)
Assets:
Non-current assets . . . . . . . . . . . . . . .
Thereof intangible assets . . . . . . . . . .
Thereof property, plant and equipment
Current assets . . . . . . . . . . . . . . . . . .
Thereof inventories . . . . . . . . . . . . . .
Thereof trade receivables . . . . . . . . . .
Thereof financial receivables . . . . . . .
Thereof cash and cash equivalents . . .
Total assets . . . . . . . . . . . . . . . . . . . . . .
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Equity and liabilities
Equity attributable to Siltronic AG shareholders .
Thereof capital reserves . . . . . . . . . . . . . . . . . .
Thereof accumulated deficit . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . .
Equity(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Non-current liabilities . . . . . . .
Thereof provision for pensions
Current liabilities . . . . . . . . . .
Thereof financial liabilities . .
Thereof other liabilities . . . . .
Liabilities . . . . . . . . . . . . . . .
Total equity and liabilities . . . . .
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611.6
30.0
573.6
491.9
144.3
122.9
—
197.6
1,103.5
195.9
946.8
(545.2)
1.6
197.5
548.3
428.5
357.7
142.3
132.0
906.0
1,103.5
As at December 31,
2014
2013
2012
(in E millions)
(audited)
609.0
29.7
571.7
461.5
138.4
111.1
—
187.4
1,070.5
309.1
946.8
(548.4)
2.7
311.8
441.2
328.1
317.5
176.1
73.6
758.7
1,070.5
490.7
0.5
332.3
602.3
86.5
98.1
372.0
12.5
1,093.0
790.2
970.3
(262.9)
—
790.2
212.8
185.0
90.0
—
29.3
302.8
1,093.0
634.4
1.2
430.2
499.5
95.5
105.9
258.1
11.5
1,133.9
748.3
869.8
(153.6)
—
748.3
271.4
226.7
114.2
—
43.9
385.6
1,133.9
In 2014, we paid a dividend to our shareholders of A 269.5 million out of retained profit.
Non-current assets
The major item of our non-current assets is property, plant and equipment. As of March 31, 2015, our
property, plant and equipment was A 573.6 million, representing 52.0% of our total assets. Non-current
assets increased by A 118.3 million to A 609.0 million as of December 31, 2014 from A 490.7 million as of
December 31, 2013. This increase was largely due to the consolidation of SSW. As part of the consolidation
of SSW, we recorded A 20.5 million attributable to goodwill and A 9.8 million of other intangible assets.
Non-current assets decreased by A 143.7 million to A 490.7 million as of December 31, 2013 from
A 634.4 million as of December 31, 2012. The decrease resulted from regular depreciation and impairment
of our existing manufacturing equipment and the loss coming from the equity method used to reflect
investment in SSW and loans to SSW.
69
Current assets
The major items of our current assets are inventories, trade receivables and cash and cash equivalents. As
of March 31, 2015, we had inventories of A 144.3 million, representing 13.1% of our total assets, trade
receivables of A 122.9 million, representing 11.1% of our total assets, and cash and cash equivalents of
A 197.6 million, representing 17.9% of our total assets. Current assets decreased by A 140.8 million to
A 461.5 million as of December 31, 2014 from A 602.3 million as of December 31, 2013. Prior to 2014, we
had large amounts of financial receivables under our cash pooling arrangements with the Wacker group.
Financial receivables as of December 31, 2013 amounted to A 372.0 million (2012: A 258.1 million). In 2014,
the Company both paid a dividend in the amount of A269.5 million and also fully drew down a A150 million
credit facility from the Wacker group. This resulted in a shift within current assets from financial
receivables (which were nil at the end of 2014) to cash and cash equivalents, which increased from
A 12.5 million at the end of 2013 to A 187.4 million at the end of 2014. Current assets increased by
A 102.8 million to A 602.3 million as of December 31, 2013 from A 499.5 million as of December 31, 2012.
The increase in current assets from 2012 to 2013 was primarily attributable to positive cash flow from cash
pooling arrangements with the Wacker group and from the PLTA which increased financial receivables.
Equity
The major components of our equity are capital reserves and accumulated deficit, and more recently,
remeasurements of defined benefit plans, which have been impacted by interest rates which have dropped
relatively quickly in the past three years. Equity amounted to A 197.5 million as of March 31, 2015
compared with A 311.8 million as of December 31, 2014, A 790.2 million as of December 31, 2013 and
A 748.3 million as of December 31, 2012. Remeasurement of defined benefit plans contributed to the
decreases since 2013. In the first quarter of 2015, equity decreased in the amount of A 91.2 million due to
the remeasurement of defined benefit plans. During 2014, a negative impact of A 135.5 million was
attributed to remeasurement of defined benefit plans. The reductions arose primarily because the interest
rates used to calculate provisions for the German and U.S. pensions in 2013 had been 3.8 percent and
4.8 percent, respectively, and were at 1.65 percent and 3.61 percent, respectively as of March 31, 2015.
Our capital reserves increased from A 869.8 million as of December 31, 2012 to A 970.3 million as of
December 31, 2013 and decreased to A 946.8 million as of December 31, 2014. This increase from 2012 to
2013 was primarily due to a capital increase from the PLTA. The overall decrease from 2013 to 2014 was
due to a combination of a capital increase of A 15.5 million from the PLTA and a capital reduction of
A 39.0 million arising from payment to a shareholder (Wacker Chemie AG) under the Labor Support
Agreement.
Our accumulated deficit increased from A 153.6 million as of December 31, 2012 to A 262.9 million as of
December 31, 2013 and to A 548.4 million as of December 31, 2014. These increases were due to our losses
for the respective years 2013 and 2014 and to a dividend paid to shareholders in the amount of
A 269.5 million in 2014.
In 2014, we recorded a non-controlling interest for the first time following the consolidation of SSW.
Non-controlling interest attributable to Samsung’s part ownership of SSW amounted to A 2.7 million as of
December 31, 2014.
Non-current liabilities
The major item of our non-current liabilities is provision for pensions. As of March 31, 2015, provision for
pensions was A 428.5 million, representing 47.3% of our liabilities. Non-current liabilities increased by
A 228.4 million to A 441.2 million as of December 31, 2014 from A 212.8 million as of December 31, 2013.
Non-current liabilities decreased by A 58.6 million to A 212.8 million as of December 31, 2013 from
A 271.4 million as of December 31, 2012. The overall increase or decrease between periods was primarily
due to changes in provision for pensions. The increase from 2013 to 2014, however, was also impacted by
the consolidation of SSW, which increased financial liabilities and other non-current liabilities related to
liabilities from a loan from Samsung to SSW and for prepayments made to SSW (to the extent maturities
exceeded one year).
Current liabilities
Since consolidating SSW, the major items of our current liabilities are financial liabilities and other current
liabilities. As of March 31, 2015, financial liabilities due under a credit facility from Wacker Chemie AG
70
amounted to A 142.3 million. Other current liabilities as of the same date relate to short-term portions of
prepayments received from customers (including Samsung) amounting to A 132.0 million. Before
consolidating SSW, current liabilities were split between trade liabilities, other current provisions and other
current liabilities.
Current liabilities increased by A 227.5 million to A 317.5 million as of December 31, 2014 from
A 90.0 million as of December 31, 2013. The increase from 2013 to 2014 was largely due to the
consolidation of SSW and the Company’s utilization of a credit facility with Wacker Chemie AG. The
consolidation led to increases in trade liabilities, which rose from A 39.7 million as of December 31, 2013 to
A 55.8 million as of December 31, 2014, and other current liabilities, which rose from A 29.3 million as of
December 31, 2013 to A 73.6 million as of December 31, 2014. We also drew down A 150.0 million under
the credit facility in December 31, 2014 and borrowed A 26.0 million from Wacker Chemie AG under our
cash pooling arrangements, resulting in financial liabilities of A 176.1 million in 2014. Current liabilities
decreased by A 24.2 million to A 90.0 million as of December 31, 2013 from A 114.2 million as of
December 31, 2012. The decrease from 2012 to 2013 was primarily due to fewer trade liabilities (2013:
A 39.7 million; 2012: A 54.7 million) and a decrease in other current liabilities (2013: A 29.3 million; 2012:
A 43.9 million).
Through repayment of the borrowings under the cash pooling arrangements and a partial repayment of the
credit facility, financial liabilities as of March 31, 2015 amounted to A 142.3 million. The net proceeds of
this Offering will be used to fully repay remaining amounts outstanding under the credit facility.
F.
LIQUIDITY
AND
CAPITAL RESOURCES
During all of the periods presented, our operations and other liquidity requirements were funded through
cash flow generated by operating activities (including prepayments), funding from the Wacker group as a
result of a cash pooling arrangement implemented for the Wacker group, a credit facility by the Wacker
group and contributions by our shareholder Wacker Chemie AG.
At the end of 2014, Wacker Chemie AG provided Siltronic AG with a new credit facility in the amount of
A 150 million, replacing a previously existing A 150 million facility which had never been drawn. We drew
down the facility on December 29, 2014 in full and increased our cash by the same amount. The terms of
the credit facility include an interest rate of 0.924 percent and customary financial and other covenants.
Proceeds from borrowings under the credit facility are intended to fund our ongoing operations and are
reflected as cash on our statement of financial position. The credit facility matures on the earlier of
June 30, 2015 or such time as the Wacker group ceases to own 100% of the Company’s shares. For more
information on the credit facility, please see ‘‘Part 15: Certain Relationships and Related Party Transactions—
A. Relationship with Wacker Chemie AG—Shareholder Loan Agreements.’’
We expect our primary sources of liquidity in the future will be cash generated from operations, cash on
hand and if necessary, other future financing arrangements, including bank loans or lines of credit. Any
prepayments we receive from customers would also be used as liquidity. Our principal uses of liquidity will
be to fund our working capital and capital expenditures. We believe our working capital is sufficient for our
current needs. Our ability to continue to fund these items may be affected by general economic,
competitive and other factors, many of which are outside of our control. If our future cash flows from
operations and other capital resources are insufficient to fund our liquidity needs, we may be forced to
reduce or delay our capital expenditures, sell assets, obtain additional debt or equity capital or refinance all
or a portion of our debt.
Cash and cash equivalents as of December 31, 2014 totaled A 187.4 million, compared to A 12.5 million as
of December 31, 2013. The cash and cash equivalents for both periods were partly held by our foreign
subsidiaries. Repatriation tax effects are not material.
71
Cash flow
The following table sets forth our consolidated cash flow information for the three months ended
March 31, 2015 and 2014 and the years ended December 31, 2014, 2013 and 2012.
Three-month
period ended
March 31,
2015
2014
(unaudited)
Net profit/(loss) for the period . . . . . . . . . . . . . . . . . . .
Depreciation, amortization and impairments/write-ups of
non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash expenses and income . . . . . . . . . . . . . .
Loss from disposal of non-current assets . . . . . . . . . . . .
Loss from investment in joint venture . . . . . . . . . . . . . .
Changes in inventories . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade receivables . . . . . . . . . . . . . . . . . . . . .
Changes in other assets . . . . . . . . . . . . . . . . . . . . . . . .
Changes in deferred taxes . . . . . . . . . . . . . . . . . . . . . . .
Changes in provisions . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade liabilities . . . . . . . . . . . . . . . . . . . . . .
Changes in other liabilities . . . . . . . . . . . . . . . . . . . . . .
Taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow from (used in) operating activities . . . . . . . . .
...
1.9
(3.0)
(27.0) (109.3)
(90.6)
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31.8
14.2
0.6
—
0.5
0.2
(12.2)
1.2
6.0
3.9
1.6
(1.6)
(0.4)
0.0
47.7
32.4
(16.4)
0.0
3.5
(4.8)
12.1
(3.8)
0.3
1.6
12.0
55.7
(1.5)
(1.0)
0.1
87.2
149.2
(13.3)
0.2
3.5
(14.2)
6.5
(0.4)
(2.8)
5.8
(8.5)
39.5
(10.9)
(3.0)
0.1
124.7
122.1
2.5
0.2
42.5
7.4
(1.7)
(5.4)
2.7
9.1
2.7
(18.3)
(7.1)
(0.1)
0.4
47.7
92.8
(10.0)
0.1
26.6
11.3
(14.2)
5.5
(0.8)
18.9
(12.7)
(65.8)
(7.4)
(0.2)
0.3
(46.2)
Investment in intangible assets, property, plant and
equipment (net of investment grants) . . . . . . . . . .
Payments for loans in joint venture . . . . . . . . . . . . .
Proceeds from disposal of intangible assets, property,
and equipment . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of subsidiary, net of cash acquired . . . . .
Cash flow from (used in) investing activities . . . . . .
.....
.....
plant
.....
.....
.....
.
.
(8.1)
—
(8.3)
—
(37.7)
—
(32.0)
—
(76.6)
(29.9)
.
.
.
0.0
—
(8.1)
0.2
26.2
18.1
0.3
26.2
(11.2)
0.7
1.1
—
—
(31.3) (105.4)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank loans repaid . . . . . . . . . . . . . . . . . . . . . . .
Capital reduction due to labor support agreement
Increase in cash pooling . . . . . . . . . . . . . . . . . . .
Negative balance under cash pooling with Wacker
Proceeds from PLTA paid into equity . . . . . . . . .
Proceeds from a loan granted by Wacker . . . . . . .
Utilization / (increase) of funds in cash pooling . .
Other financial liabilities raised . . . . . . . . . . . . . .
Cash flow from (used in) financing activities . . . .
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2014
2013
2012
(in E millions)
(audited)
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— (269.5) (269.5)
—
— (197.3) (196.4)
—
—
—
(39.0)
—
—
—
— (122.1)
—
—
26.0
—
—
100.5
116.0
108.3
—
—
150.0
—
(33.8) 288.3
271.5
—
0.3
—
—
—
(33.5) (78.0)
58.6
(13.8)
Changes due to exchange-rate fluctuations . . . . . . . . . . . . . .
4.1
0.1
2.8
Cash at beginning of the year . . . . . . . . . . . . . . . . . . . . . . .
Cash at end of the period . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in cash and cash equivalents . . . . . . . . . . . . . . . . .
187.4
197.6
10.2
12.5
39.9
27.4
12.5
187.4
174.9
—
(0.5)
—
0.0
—
14.4
—
144.4
—
158.3
(1.6)
(0.4)
11.5
12.5
1.0
5.2
11.5
6.3
Cash flow from (used in) operating activities. Our cash flow from operating activities in the three-month
period ended March 31, 2015 was significantly lower than in the first three months of 2014 as we recorded
a cash inflow of A 53.2 million in prepayments in the first quarter of 2014 and did not have any proceeds
from prepayments to record in the first quarter of 2015.
Our cash flow from operating activities increased by A 77.0 million from A 47.7 million in 2013 to
A 124.7 million in 2014. In 2014, we received cash inflows from customer prepayments of A 64.3 million and
refunded A 21.6 million in cash resulting in a net inflow of A 42.7 million. In 2013, no proceeds from
customer prepayments were received, but we refunded A 15.9 million of prepayments from cash. The
72
changes in customer prepayments are included in the line item ‘‘changes in other liabilities.’’ Thus, the
impact of prepayments on the cash flow from operating activities amounted to A 58.6 million when
comparing the cash flow from operating activities in the year 2014 with the preceding year. We had a cash
outflow from working capital comprising inventory, trade receivables and trade liabilities in the amount of
A 16.2 million in 2014 compared to a cash inflow of A 8.4 million in 2013.
In 2013, our cash flow from operating activities increased by A 93.9 million to A 47.7 million from cash flow
used in operating activities of A 46.2 million in the year ended December 31, 2012. In both 2012 and
2013, we made payments for severance and pensions to former employees of the production facilities in
Hikari and Portland. These payments amounted to A 57.6 million in 2012, but decreased significantly to
A 2.5 million in 2013. We did not receive any proceeds from customer prepayments in 2013, but refunded
A 15.9 million from cash. In the year 2012, we received customer prepayments in the amount of
A 4.5 million and refunded A 4.4 million in cash. We had a cash inflow from working capital comprising
inventory, trade receivables and trade liabilities in the amount of A 8.4 million in 2013. In 2012, cash
outflows from working capital amounted to A 15.6 million.
Cash flow from (used in) investing activities. For the period under review, our cash flow used in investing
activities consisted primarily of financial investments in SSW and the purchase of equipment. In the first
three months of 2015, cash flow used in investing activities consisted entirely of minor capital investments
in property, plant and equipment.
Cash flow used in investing activities decreased by A 20.1 million to A 11.2 million in 2014 from
A 31.3 million in 2013. The decrease is driven by cash acquired through the acquisition of SSW. Taking this
increase in cash out of consideration, cash flow used in investing activities increased from A 31.3 million in
2013 by A 6.1 million to A 37.4 million in 2014.
Cash flow used in investing activities in the year ended December 31, 2013 decreased by A 74.1 million to
A 31.3 million from A 105.4 million in the year ended December 31, 2012. The decrease was due to lower
investments in property, plant and equipment in an amount of A 44.6 million and from a shareholder loan
we gave to SSW of in the amount of A 29.9 million in 2012 whereas no shareholder loan was given in the
financial year 2013.
Cash flow from (used in) financing activities. Cash flow from financing activities consists primarily of
payments from the Wacker group to us and from us to the Wacker group. In the first quarter of 2015,
almost the entire cash inflow generated in operating activities less cash outflow used in investing activities
was used to repay amounts drawn under the cash pooling agreement with the Wacker group.
For periods prior to 2015, because of the PLTA, the Wacker group had an obligation to compensate us for
losses of Siltronic AG (based on German GAAP) which we record as a financial receivable. This liability is
generally settled in cash once the annual results have been approved by the supervisory board in the
beginning of the following year. This resulted in payments from the Wacker group in the amounts of
A 116.0 million, A 108.3 million and A 14.4 million in 2014, 2013 and 2012, respectively. The repayment of
loans after the acquisition of SSW and changes of the balances at the financial receivables / liabilities with
the Wacker group, as well as the dividend we paid, are all recorded under cash flow from financing
activities.
Cash flow from (used in) financing activities increased by A 72.4 million to positive A 58.6 million in 2014
from negative A 13.8 million in 2013. The cash outflows related to financing activities resulted from (i) a
dividend payment of A 269.5 million from Siltronic AG to its shareholders out of its remaining retained
profit, (ii) repayment of A 196.4 million of SSW’s project financing loans which we repaid in full after we
acquired a majority stake in SSW and (iii) a A 39.0 million payment we made pursuant to the Labor
Support Agreement (see ‘‘Part 15: Certain Relationships and Related Party Transactions—A. Relationship
with Wacker Chemie AG—Labor Support Agreement’’) which was treated as a capital reduction. These
cumulative cash outflows were financed through combined PLTA proceeds of A 116.0 million, the
utilization of cash-pooled funds in an amount of A 271.5 million, a loan from the Wacker group in the
amount of A 150.0 million and a negative balance of A 26.0 million under a cash pooling agreement we have
with the Wacker group.
When comparing the financial year 2013 with 2012, cash flow from financing activities decreased by
A 172.1 million to negative A 13.8 million in the full-year period 2013 from A 158.3 million in the full-year
period 2012. In the year 2012, financial receivables from the Wacker group (cash pooling at Wacker
Chemie AG) were consumed with an amount of A 144.4 million. In 2013, financial receivables from the
73
Wacker group (cash pooling at Wacker Chemie AG) increased by A 122.1 million because we pooled our
funds there that we did not need in form of cash on hand or cash at banks. The change of A 266.5 million
was partly compensated by higher proceeds from the PLTA (an increase of A 93.9 million).
Capital Expenditures (Investments)
Capital expenditures consist of the purchase of property, buildings, machinery and equipment including
office equipment and intangibles. Historically, our capital expenditures were generally financed by
operating cash flows and by reducing liquidity if required. In the next three years, we currently plan to
make total capital expenditures in the range of A 50 million to A 100 million per year, including 2015,
approximately half of which is intended for capability improvements to keep up with advancing customer
specifications and productivity increases, roughly ten percent of which is reserved for capacity extension
and the rest to be used for other capital expenditures. We have recently approved several upcoming
investment projects, including the purchase and upgrade of crystal pullers in Singapore, some capability
enhancements of our equipment in Germany and the automation of a 300 mm line in Germany, all of
which are expected to be funded by cash on hand. We plan to fund these expenditures and anticipated
investments using cash flows from our operations and cash and cash equivalents.
In the year ended December 31, 2014, we made capital expenditures of A 40.5 million mainly for new
machinery to improve capabilities. We made capital expenditures of A 30.4 million and A 72.6 million in the
years ended December 31, 2013 and 2012, respectively. In 2014 and 2013, our capital expenditures
consisted of A 15.3 million and of A 13.2 million, respectively, for machinery and technical equipment. In
2012, our capital expenditures were comprised of A 72.6 million, primarily for buildings under construction,
machinery and technical equipment.
Liabilities
Financial Liabilities and other liabilities
As of December 31, 2014, our financial liabilities amounted to A 211.9 million, attributable to an interestbearing loan and a negative balance under the cash pooling agreement, both with the Wacker group and an
interest-bearing shareholder loan provided by Samsung to SSW. Other liabilities include prepayments the
Group has received from customers of which, as of December 31, 2014, A 67.1 million remained
outstanding. As of March 31, 2015, our financial liabilities amounted to A 181.5 million, attributable to an
interest bearing loan from the Wacker group and an interest bearing shareholder loan provided by
Samsung to SSW.
Contractual Obligations
The following table sets forth our contractual commitments as at December 31, 2014.
Contractual obligations
Total
Payments Due by Period
Less than
1-3
3-5
1 Year
Years Years
5 Years
or More
(in E millions)
Obligations from rent and operating leases
Obligations from orders for investments . .
Purchase obligations . . . . . . . . . . . . . . . .
Total contractual obligations . . . . . . . . . .
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38.0
6.7
7.8
52.5
2.5
6.7
7.8
17.0
3.1
0.0
0.0
3.1
3.1
0.0
0.0
3.1
29.3
0.0
0.0
29.3
Within the framework of our raw-material supplies, we have entered into long-term purchase agreements
for strategic raw materials which resulted in other financial obligations from minimum purchasing
obligations in the amount of A 7.8 million at December 31, 2014.
Incentives and Grants
We receive government incentives and grants for investing activities as well as for R&D activities. The
incentives for investments are given on the condition that the machinery and equipment is located in a
specific area of Germany and with respect to R&D that these projects are executed and specific cost
restrictions are met. If these contractual commitments are not fulfilled, any funding received must be paid
back either in full or in part. The period for which we have to fulfill our contractual commitments is
74
limited. We received incentives and cash grants of A 3.2 million in the year ended December, 2014 and
A 3.4 million during the year ended December 31, 2013.
Pension Provisions
Provisions for pensions as at March 31, 2015 were calculated based on an interest rate of 1.65 percent in
Germany and 3.61 percent in the U.S. As at December 31, 2014, provisions for pensions were calculated
based on an interest rate of 2.3 percent in Germany and 3.8 percent in the U.S. The change in assumptions
from December 31, 2014 to March 31, 2015 resulted in an increase of A 91.2 million, an unusually large
increase for one quarter. As at December 31, 2013 the interest rates used to calculate provisions for the
German and U.S. pensions had been 3.8 percent and 4.8 percent, respectively. The change in assumptions
led to an increase of A 135.5 million in 2014. As at December 31, 2012 the interest rates used to calculate
provisions for the German and U.S. pensions amounted to 3.5 percent and 4.0 percent, respectively. The
table below shows the present value and provisions for defined benefit plans as at December 31, 2014 and
December 31, 2013:
As of December 31, 2014
(in E millions)
(audited)
Germany Foreign
Total
(in E millions)
(audited)
Germany Foreign
Total
Present value of the at least partially
fund-financed defined benefit obligations . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . .
498.4
350.3
121.6
83.5
620.0
433.8
371.0
315.7
89.3
67.8
460.3
383.5
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . .
148.1
38.1
186.2
55.3
21.5
76.8
Present value of unfunded defined benefit
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
136.5
5.4
141.9
104.2
4.0
108.2
Net liability of defined benefit obligations . . . . . .
284.6
43.5
328.1
159.5
25.5
185.0
The following table shows the sensitivity of pension obligations resulting from changes in the basic
actuarial assumptions:
December 31, 2014
Defined
benefit
obligation
in E millions
(audited)
% change
Effect on Defined Benefit Obligation
Present value of pension obligations as of the reporting date .
Present value of all pension obligations if:
the discount rate increases by 0.5% . . . . . . . . . . . . . . . . .
the discount rate decreases by 0.5% . . . . . . . . . . . . . . . . .
salaries increase by 0.5% . . . . . . . . . . . . . . . . . . . . . . . . .
salaries decrease by 0.5% . . . . . . . . . . . . . . . . . . . . . . . . .
future pension increases are 0.25% higher . . . . . . . . . . . .
future pension increases are 0.25% lower . . . . . . . . . . . . .
life expectancy increases by one year . . . . . . . . . . . . . . . .
..............
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762.0
692
842
771
753
783
742
787
—
(9.2)%
10.6%
1.2%
(1.1)%
2.8%
(2.7)%
3.3%
For our employees, there are various post-employment pension plans, which depend on the legal,
economic and fiscal conditions prevailing in the respective countries. These pension plans generally take
account of employees’ length of service and salary levels. Our pension plans make a distinction between
defined contribution and defined benefit plans. Defined contribution plans lead to no further obligation
for the company beyond paying contributions into special-purpose funds. Our Group companies have both
defined-contribution and defined-benefit plans, partially financed by Pensionskasse der Wacker Chemie
VVaG and by funds. Pension obligations result from defined benefit plans in the form of entitlements to
future pensions and ongoing payments for eligible active and former employees of our Group and their
surviving dependents. The various pension plans basically provide employees upon retiring with (i) a
life-long pension for the employee and/or the employee’s spouse or (ii) a lump sum payment.
We contracted with Wacker Chemie AG for A 39 million to transfer (without recourse) up to 500
employees through 2019. For all employees that are transferred between us and Wacker Chemie AG, the
respective pension obligation for that employee will be transferred to the new employer. Any unfunded
obligation according to German GAAP will be compensated with a cash payment and pension reserves will
75
be reduced by the same amount without any effect on the statement of profit or loss. Reserves under
German GAAP, which are lower than the reserves according to IFRS, are used to determine the
compensation amount if any. The basic pension (Grundversorgung), which is financed by Pensionskasse der
Wacker Chemie VVaG, is fully funded under German GAAP. Therefore, the transfer of employees under
this contract is expected to lead to a decrease of pension provisions according to IFRS without additional
cash payments. For more information on this agreement, please see ‘‘Part 15: Certain Relationships and
Related Party Transactions—A. Relationship with Wacker Chemie AG—Labor Support Agreement’’. We
estimate approximately 100 employees had been transferred under the Labor Support Agreement as of
March 31, 2015. Assuming the remaining employees had also been transferred as of March 31, 2015, we
estimate that the provision for pensions according to IFRS would have decreased by approximately
A 27 million because the pension obligations related to the personnel transferred from the Company would
have been transferred to Wacker Chemie AG along with the employee. We have based this figure on a
calculation by our actuary measuring the hypothetical change in the Company’s pension provisions and
equity using a discount rate of 1.65% and assuming a transfer of pension provisions for 400 additional
employees based on a representative employee affected by the Labor Support Agreement. We believe the
reduction in the Company’ provision for pensions would not have affected the Company’s cash position
nor would there have been an expense recorded in the Company’s statement of profit or loss. Under the
same assumptions, equity (other comprehensive income) would have increased by approximately
A 27 million.
If the discount rate used for calculating the provision for pensions in Germany as of March 31, 2015 had
been 3.50% instead of 1.65%, the A 428.5 million provision for pension reported in the Company’s
consolidated statement of financial position at the end of the first quarter 2015 would have been
A 224 million lower. As of May 15, 2015 the respective discount rates to determine the pension liability
have increased compared to March 31, 2015. According to AON Hewitt AG, the discount rate for a typical
pension plan went up by approximately 0.5% from March 31, 2015 to May 15, 2015. If the discount rate
used for calculating the provision for pensions in Germany as of March 31, 2015 had been 2.15% instead of
1.65% the A 428.5 million provision for pension reported in the Company’s consolidated statement of
financial position at the end of the first quarter 2015 would have been A 68.1 million lower.
As of March 31, 2015 and December 31, 2014 the unfunded and funded defined benefit obligations and the
fair value of plan assets were as follows:
As of March 31, 2015
(in E millions)
Germany Foreign
Total
Present value of funded defined benefit
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
(in E millions)
Germany Foreign
Total
576.2
357.5
142.4
94.0
718.6
451.5
498.4
350.3
121.6
83.5
620.0
433.8
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . .
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
218.7
48.4
267.1
148.1
38.1
186.2
155.2
6.2
161.4
136.5
5.4
141.9
Provisions for pensions and similar obligations . . .
373.9
54.6
428.5
284.6
43.5
328.1
Other Provisions
(in E millions)
(audited)
Of which
Of which
Total
non-current
current
(in E millions)
(audited)
Of which
Of which
Total
non-current
current
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring . . . . . . . . . . . . . . . . . . . . . . . .
Sundry . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29.1
1.8
3.3
26.1
0.1
0.0
3.0
1.7
3.3
23.4
4.9
5.1
22.7
0.1
—
0.7
4.8
5.1
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.2
26.2
8.0
33.4
22.8
10.6
Provision for Taxes . . . . . . . . . . . . . . . . . . . .
4.1
0.1
4.0
10.5
0.1
10.4
Provisions for personnel consist of anticipated future cost for early retirement resulting in continuing
payouts and anticipated future cost for anniversary payments. The provision for restructuring primarily
relates to severance payments and to a minor part to obligations for dismantling of buildings.
Provisions for taxes mainly reflect the anticipated results of tax audits.
76
Off-balance sheet Agreements
As of December 31, 2014, we had no off-balance sheet agreements.
G.
INFORMATION FROM THE AUDITED UNCONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY
PREPARED IN ACCORDANCE WITH THE GERMAN COMMERCIAL CODE (HANDELSGESETZBUCH) AS OF
AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
Some information from the Company’s audited unconsolidated financial statements prepared in
accordance with the German Commercial Code (Handelsgesetzbuch) as of and for the fiscal year ended
December 31, 2014 is presented below. Such financial statements are included in the financial section
beginning on page F-80.
In the fiscal year ended December 31, 2014, the Company generated revenues in the amount of
A 764.1 million as determined on an unconsolidated basis in accordance with the German Commercial
Code (Handelsgesetzbuch). In comparison, revenues in the fiscal year ended December 31, 2013 amounted
to A 755.9 million. In the fiscal year ended December 31, 2014, the Company generated an operating loss in
the amount of A 55.1 million, compared to an operating loss of A 92.6 million in the fiscal year ended
December 31, 2013.
The Company’s subscribed capital was A 100.0 million (consisting of 50,000,000 no par value shares) in the
fiscal years ended December 31, 2014 and December 31, 2013. In addition, capital reserves remained at
A 340.0 million during the same periods. Provisions for pensions and similar obligations under German
generally accepted accounting principles increased slightly from A 87.5 million in 2013 to A 93.5 million in
2014. The discount rate used for calculating the provisions for pensions and similar obligations was 4.55%
in 2014 and 4.89% in 2013.
Siltronic AG may only pay dividends from its distributable profit (Bilanzgewinn) which is determined based
on net income or loss for the fiscal year adjusted for profit/loss carry-forwards from the prior fiscal year
and allocations to or releases from reserves. Absent net income in any given fiscal year, Siltronic AG may
only pay dividends from retained profit. Retained profit amounted to A 269.5 million in 2013. Siltronic AG
paid a dividend to its shareholders in the same amount in 2014, exhausting retained profit in 2014. Certain
of Siltronic AG’s subsidiaries have generated profits from which they could pay upstream dividends to
Siltronic AG which may result in net income or retained profit of the Company from which the Company
could pay dividends in the future.
H.
QUANTITATIVE
AND
QUALITATIVE DISCLOSURE
ABOUT
MARKET RISK
In the normal course of business, we are exposed to credit, liquidity, and market risks. Our management
board receives regular analyses on the extent of anticipated risks. The analyses focus on net interest
income, market risks, foreign-currency exchange risks and interest rate risks as they relate to EBITDA.
The goal of financial risk management is to limit risks from the operating business and the resultant
financing requirements by using certain derivative and non-derivative hedging instruments. In the past, we
have followed certain guidelines established for Wacker group companies. Thus, these practices may
change as economic conditions change and as our own policies develop independent of the Wacker group.
Although we prepare our combined financial statements in Euro, most of our sales are denominated in
currencies other than the Euro, including the Singapore Dollar and U.S. Dollar. The portions of our sales
and expenses denominated in currencies other than the Euro are exposed to exchange rate fluctuations in
the values of these currencies relative to the Euro.
We prepare a rolling forecast each month which demonstrate results of volatility and hypothetical changes
of relevant risk variables on our revenue, profit and liquidity. Based on our plans and forecasts, we
calculate cash flows by currency per quarter. We define net exposure as the difference between U.S. Dollar
cash inflows and U.S. Dollar cash outflows and Japanese Yen cash inflows and Japanese Yen cash outflows.
We purchase forward contracts for a certain percentage of the net exposure for a certain time horizon
(generally up to 18 months). The efficiency of our hedging policy is monitored monthly.
77
A fluctuation of the Euro/U.S. Dollar exchange rate of ten percent as of December 31, 2014, 2013 and
2012 with other conditions remaining unchanged, would have the following effect on the fair value of our
hedging instruments:
2014(1)
2013(2)
2012(3)
Value of the U.S. Dollar in relation to the Euro:
+10%
10% +10%
10% +10%
10%
(in E millions)
Change in the fair value of hedging instruments . . . . . . .
(1)
Euro/U.S. Dollar-exchange rate as at December 31, 2014: 1.2101
(2)
(3)
(26)
26
(26)
26
(32)
32
If the value of the Japanese Yen in relation to the Euro increased or decreased respectively by ten percent
against the Euro as at December 31, 2014, the fair value of the hedging instruments would have decreased
or increased respectively by approximately A 7 million (2013 and 2012: no substantial change since the
hedging instruments in Japanese Yen covered a very low amount only).
We are also subject to interest rate risk related to our pension plan assets and cash equivalents. Our
pension plan assets are invested primarily in marketable securities including fixed income and equity
securities, interest bearing deposits and bonds. For additional information and sensitivity analyses with
regards to our pensions, please see ‘‘—E. Liquidity and Capital Resources’’ and ‘‘—H. Critical Accounting
Policies and Estimates.’’
We mitigate our liquidity risk by reviewing our cash needs on a rolling basis to seek to ensure we can
service our financial liabilities. Our liquidity condition is monitored by comparing cash outflows each of the
next three months with the cash inflows for each of the next three months. In addition, actual cash flows
are compared to forecasted cash flows to identify unplanned developments early. Moreover, we produce a
cash flow forecast on a monthly rolling basis covering the period to the end of the financial year. This
forecast is in accordance with the monthly forecasts of statement of profit and loss and statement of
financial position which also cover the period to the end of the financial year. External events considered
being outside the area of expectation and which are unforeseeable like natural disasters or wars do not
play a role.
We are subject to credit and default risks should a contractual party fail to fulfill its commitments. With
respect to financial instruments, the maximum risk is the amount of the respective financial instrument’s
positive fair value. To limit the risk of default, we conduct transactions within defined limits and with
partners of very high credit standing. With respect to operations, outstanding receivables and default risks
are partly insured by trade credit insurance. Receivables from major customers represent a low enough
proportion of our sales as to not present an extraordinary concentration of risks, but we have had some
losses in the past related to defaulting customers. To minimize the impact of losses from customers, we
have implemented rules to monitor receivables including dunning and stop of shipments.
I.
CRITICAL ACCOUNTING POLICIES
AND
ESTIMATES
The preparation of our financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of
contingent assets and liabilities. We consider an accounting estimate to be critical to the financial
statements (i) if the estimate is complex in nature or requires a high degree of judgment and (ii) if the use
of different estimates and assumptions could result in a material impact on the consolidated financial
statements. On an ongoing basis, we evaluate our estimates and application of our policies. We base our
estimates on historical experience, current conditions and on various other assumptions that we believe are
reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The policies that we believe are
critical to the preparation of the consolidated financial statements are presented below.
78
Property, plant and equipment: Useful lives and Impairment
The expected useful life of property, plant and equipment and the depreciation methods are based on our
past experience, our estimates on the future development taking the volatile market developments into
consideration, technical progress and procedures customary to our industry. We usually depreciate our
main buildings over a period between 25 and 30 years and our main machinery and equipment between six
and twelve years depending on the type of machinery. These main items of property, plant and equipment
are depreciated using the straight-line method.
We periodically assess the impairment of long-lived assets when conditions indicate a possible loss. The
assessments are performed to determine whether the carrying value of an asset is impaired, based on
comparisons to discounted expected future cash flows or market values. If these comparisons indicate that
an impairment is applicable, the asset is written down to its estimated fair value. In this context,
management assesses future cash flows, especially in regards to the development of average sales prices,
volumes and discount rates. Moreover, management also defines cash generating units to determine which
cash flows are compared to which book values.
Purchase price allocation in connection with the consolidation of SSW
When acquiring SSW, the existing investment in equity and loans to SSW were included in the
consideration for the acquisition at fair value. The consideration is then allocated to the assets and
liabilities acquired. As a consequence of the purchase price allocation, we recorded goodwill in the amount
of A 20.5 million and an intangible asset to reflect the customer relationship between SSW and Samsung in
an amount of A 9.6 million.
The goodwill is not subject to a regular amortization but subject to an annual impairment test or whenever
there is an indication that the amount may be impaired. Under this impairment test, management
determines (i) the long-term EBITDA margin of the cash generating unit to which the goodwill is
allocated, (ii) the remaining useful life of the cash generating unit and (iii) the discount rate.
The intangible asset recorded to reflect the customer relationship with Samsung is amortized over the
expected period of the customer relationship with Samsung.
Pension Provisions and Similar Obligations
Provisions for pensions and similar obligations (especially early retirement and anniversary payments) are
based on actuarial appraisals. These valuations are based on statistical and other factors in order to
anticipate future events. Although most of the parameters are defined by actuaries, management decides
between alternative parameters, e.g. when a decision on the future salary trend has to be made or the
application of different mortality tables.
Pensions are measured in accordance with the projected unit credit method prescribed in IAS 19
Employee Benefits for defined benefit plans. This method takes into account the pensions known and
expectancies earned by the employees as of the reporting date as well as the increases in salaries and
pensions to be expected in the future. The provisions for the German entities are measured on the basis of
modified 1998 mortality tables by Klaus Heubeck. Pension obligations outside Germany, particular for our
U.S. subsidiary, are determined in accordance with actuarial parameters applicable to such plans, including
U.S. federal law and on the basis of the sex-distinct RP-2014 Mortality Table (scale AA to 2014).
Actuarial gains and losses arise from the difference between the previously expected and the actual
obligation parameters at year-end. Actuarial gains and losses, net of tax, for the defined benefit plan are
recognized in full in the period in which they occur in other comprehensive income. Such actuarial gains
and losses are also immediately recognized in retained earnings and are not reclassified to profit or loss in
subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The
Group recognizes changes in the net defined benefit obligation from service costs comprising current
service costs, past-service costs, gains and losses on curtailments under ‘cost of sales,’ ‘administration
expenses’ and ‘selling and distribution expenses’ in consolidated statement of profit or loss (by function)
and the net interest expense or income under finance costs and finance income.
If any of the assumptions, including discount rates, or employee-related assumptions change, our pension
obligations may change, which may have an impact on our results of operations. Please see ‘‘—E. Liquidity
79
and Capital Resources—Pensions’’ for more information on our pension provisions and the impact changes
in discount rates have had during the period under review.
Accounts Receivable
Allowances for doubtful accounts are maintained based on an assessment of the collectability of specific
customer accounts, the aging of accounts receivable and other economic information on both a historical
and prospective basis. Impairment losses on specific customer accounts are charged against the allowance
when objective evidence exists that the amount due will not be fully collectible in the normal course of
business. Management assesses risk of customer default, particularly when it comes to receivables from
major customers who are showing critical financial performance.
If we experience changes in collectable accounts either for a large customer or as a result of overall
deterioration in economic conditions, our allowance for doubtful accounts may need to be adjusted, which
would impact our result from operations and liquidity.
Deferred Taxes
At the end of each statement of financial position date, the Group assesses whether the probability of
future tax benefits being realized is sufficient to recognize deferred taxes. Among other things, this
requires that management evaluates the tax benefits resulting from currently available tax strategies and
future taxable income, as well as taking additional positive and negative factors into account.
Given the volatile industry we are engaged in and the long periods over which benefits from deferred tax
assets often materialize, management judgment plays a significant role.
Hedging Instruments and Foreign Currency Transactions
We buy and sell derivative financial instruments for hedging purposes. Within the Group, all hedging
relationships are cash flow hedges. We aim to hedge foreign currency risks to limit exposure to variability
in our future cash flow. Hence, we enter financial liabilities and contingencies respectively.
A hedging relationship must meet certain criteria to qualify for hedge accounting. Detailed documentation
of the hedging relationship and proof of the expected and actual effectiveness of the hedge (between
80 percent and 125 percent are required. Hedge accounting must be discontinued when these conditions
are no longer met. We apply, where allowed, hedge accounting in order to limit the volatilities in the
statement of incomes which are caused by changes in market values. When applying hedge accounting the
total amount of changes in market values can be recognized when in addition to the statement of incomes
the items recorded in the comprehensive income are taken into account. Changes in the fair value of the
effective portion of hedging instruments are recognized in other comprehensive income. The ineffective
portion of the changes in fair value is recognized in profit or loss.
Significant Accounting Policies
Other significant accounting policies exist that are discussed in the notes to the audited consolidated
financial statements (reference is to the paragraphs prior to note 1) or elsewhere in this prospectus.
Certain of these policies include the use of estimates, but do not meet the definition of critical because
they generally do not require estimates or judgments that are as difficult or subjective to measure.
However, these policies are important to an understanding of the consolidated financial statements.
80
PART 11: MARKETS AND COMPETITION
A.
MARKETS
Semiconductor devices are at the core of modern electronics, enabling advanced features and properties.
Semiconductor silicon wafers provide the basis for most of the global production of semiconductor devices.
According to Gartner, the total semiconductor market worldwide was $ 315 billion in 2013. Semiconductor
devices include, among others, microprocessors, memory, analog, mixed-signal and RF integrated circuits,
discrete, application specific integrated circuits, micromechanical systems (MEMS) and image sensors.
Recent semiconductor growth has been largely attributable to the proliferation of mobile devices, which
has driven the need for low cost, high performance semiconductors that enable efficient power
consumption and smaller form factors. In order to meet these demands, technology innovation in the
semiconductor industry has continued at a strong pace over the past decade, resulting in increasingly
smaller and more complex structures, with increasingly demanding technical specifications and the
introduction of advanced substrates and device structures.
In addition to the continued growth of mobile devices, future semiconductor industry growth is expected to
be driven by new and emerging markets and applications, such as in the healthcare and automotive
industries, which are increasingly incorporating advanced technologies in their services and products. For
instance, the widespread use of solid state disks (SSD) and flash memory in PCs, laptops and tablets, the
increasing demand for processing large amounts of data in a growing number of industries (usually
referred to as ‘‘Big Data’’), as well as its growing ubiquity in commonplace goods (usually referred to as the
‘‘Internet of Things’’), add significant potential for future growth of semiconductor silicon wafer demand.
Accordingly, the market for semiconductor silicon wafers is large and growing. Pursuant to Gartner and as
illustrated in the chart below, the worldwide merchant semiconductor silicon wafer market measured in
million square inches is expected to grow at a five percent compound annual growth rate (CAGR) from
2013 to 2018. This growth in semiconductor silicon wafer demand is largely attributable to the proliferation
of mobile devices such as smart phones. All these increasing desire to use semiconductor devices in
industrial and automotive applications is also driving demand. These devices require semiconductors that
are energy efficient, low cost, high performing and highly integrated. Semiconductors offering those
characteristics increasingly require both polished and epitaxial, hyperpure semiconductor silicon wafers of
the newest wafer generations.
Total semiconductor silicon wafer shipments in million square inch:
5% CAGR
10,368
9,722
9,385
9,322
9,339
2010
2011
2012
2013
10,743
10,886
2015
2016
11,396
11,816
8,390
6,964
2008
2009
2014
2017
2018
19MAY201505374504
Source: Gartner
The semiconductor silicon wafer industry has undergone significant consolidation over the past 20 years,
from more than 20 suppliers in the 1990s to only five major suppliers today. The top five vendors in the
industry include Shin-Etsu Handotai, SUMCO Corporation, SunEdison Semiconductor, LG Siltron and
us. These suppliers accounted for approximately 88 percent of all semiconductor silicon wafer sales in
2013, according to Gartner. We believe that the high level of capital intensity and economies of scale
81
required to effectively compete in the semiconductor wafer industry are the main drivers for the high
degree of supplier concentration.
Semiconductor Silicon Wafer Supplier Market Share (Revenue in USD):
Shin-Etsu
27%
33%
Sumco
Siltronic
26%
32%
14%
11%
8%
7%
5%
4%
2008
SunEdison
LG Siltron
GlobalWafers
Other
11%
10%
6%
6%
2013
19MAY201505374376
Source: Gartner.
The chart above shows how the wafer supplier market has experienced significant changes in recent years.
Shin-Etsu and Sumco have decreased their market shares considerably by six percent each, while
SunEdison Semiconductor, LG Siltron and Siltronic AG have strengthened their market positions, each
gaining three percent shares. We believe that over the next five years there will be no alternative
technology, current or in development, in the semiconductor device market that will displace silicon as the
primary manufacturing input for semiconductors.
B.
COMPETITION
The market for semiconductor silicon wafers is highly competitive. We compete globally and face
competition from established manufacturers. Our major worldwide competitors are Shin-Etsu Handotai,
SUMCO Corporation, SunEdison Semiconductor and LG Siltron. Globally, we are the third largest
supplier of semiconductor silicon wafers, and the largest supplier not domiciled in Japan. Our revenue
share is approximately 14 percent according to Gartner.
The key competitive factors in the semiconductor silicon wafer market are product quality, state-of-the-art
technology, reliability, price, and customer service. We emphasize our leading technology, customer service
and consistency of delivering highest quality wafers that meet our customers evolving requirements. Some
of our competitors are larger than us, which may enable them to produce wafers at a lower per unit cost
due to economies of scale and have greater influence than us on market prices. We also believe some of
our competitors may experience competitive advantages in their home markets, where customers are
willing to pay a premium for wafers from a domestic manufacturer.
The market for semiconductor silicon wafers is characterized by a high degree of supplier concentration,
with the five largest companies holding approximately 90 percent of the global market in the aggregate.
This concentration is particularly true within the 300 mm wafer market. In addition, customers are
cooperating more closely with semiconductor silicon wafer manufacturers in the development of new wafer
generations. As in the past, we expect to benefit further from this development. Certain risks relating to
competition are set forth in ‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—We face intense
competition within our industry.’’
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PART 12: BUSINESS
A.
OUR COMPANY
We are the world’s third largest producer of semiconductor silicon wafers made from hyperpure silicon
with a global revenue share of 14 percent in 2013, according to Gartner. Silicon has been used for more
than half a century as the raw material of choice in microelectronics and the related semiconductor wafers.
Silicon constitutes the base substrate for nearly all semiconductor devices, essentially providing the
foundation for the entire, global electronics industry. Our business traces its origins to the start of research
and development of high-purity silicon in 1953 and has existed in its current form as Siltronic AG since
2004. Since the development of the first semiconductor silicon wafer in 1962, we have quickly recognized
the opportunities and prospects that presented themselves in the semiconductor industry and have
strategically invested in this technology.
Hyperpure semiconductor silicon wafers are used for increasingly finer structures, referred to as ‘‘design
rules,’’ in the nanometer range (measured in billionths of a meter). As a result, increasingly powerful and
energy efficient generations of chips are becoming more feasible to produce. Our semiconductor silicon
wafers support these trends and form the basis of the most complex semiconductor components, including
high-voltage applications, low resistivity devices in automotive engineering and telecommunications as well
as large-scale integrated microprocessors and memory modules for information processing. Hence, our
semiconductor silicon wafers can be found in numerous everyday objects including cell phones, laptops,
cars and many other consumer goods.
We serve all of the top 20 leading semiconductor silicon wafer consumers with our broad wafer portfolio
and maintain long-term relationships with all our major customers. In 2014, our five largest customers
were, in alphabetical order, Infineon Technologies, Intel Corporation, Micron Technology, Samsung
Electronics, and Taiwan Semiconductor Manufacturing Company (TSMC). We produce our high quality
wafers through our multinational manufacturing network in the United States, Europe and Asia, with
facilities strategically located near highly educated work forces and in close proximity to our customers. We
believe that we deliver the highest quality customer service and provide our customers with single local
access points for our entire semiconductor silicon wafer portfolio. We are committed to providing wafer
qualities and specifications that meet or exceed our customers’ wafer demands.
We are dedicated to drive innovation in the semiconductor silicon wafer industry. We work in close
collaboration with our customers to continually advance their products and solutions by manufacturing
polished and epitaxial wafers according to the most advanced design rules as specified by our customers.
For example, we are currently working with our customers on the commercialization of the next design
rule, commonly referred to as ‘‘11nm.’’ We have also started development on the following design rule,
commonly referred to as ‘‘8nm,’’ with a commercialization target in 2017, as we are committed to being
‘‘one generation ahead.’’ In addition, we utilize the leading float zone, or ‘‘FZ,’’ technology for wafers up
to 200 mm in diameter for wafers with extremely stable resistivity performance and high voltage
capabilities.
We have leveraged our long-standing 300 mm wafer experience into the construction of our modern, high
volume facilities in Freiberg, Germany, and Singapore. We operate among the world’s newest and largest
200 and 300 mm wafer facilities at our Singapore sites. As of January 24, 2014, we expanded our ownership
and took full control of the operations of our 300 mm wafer production joint venture with Samsung in
Singapore. Our global presence enables us to respond to customer requests anytime and anywhere in the
world in less than 24 hours and to provide our customers with a nearly 100% on-time delivery rate.
Furthermore, this fosters our close collaboration with our customers on product design and development
activities.
We have realized significant efficiency improvements and cost reductions over the last several years. Our
cost reduction roadmap has secured total cost reductions of more than A 80 million from 2012 to 2013
(based on an application of the 2012 cost basis to 2013 volumes, adjustments to certain 2013 costs to reflect
2012 contractual and economic parameters (e.g. 2012 unit labor cost), and excluding SSW) and additional
savings of approximately A 55 million from 2013 to 2014 (based on an application of the 2013 cost basis to
2014 volumes, adjustments to certain 2014 costs to reflect 2013 contractual and economic parameters
(e.g. 2013 unit labor cost), and including SSW beginning as of January 24, 2014). As a result, our operating
loss has decreased and our Adjusted EBITDA has been relatively stable in the past three years—ranging
from a high of A 122.5 million in 2012 and a low of A 112.6 million in 2013 and increasing slightly in 2014
83
compared to 2013 to A 117.7 million—despite a low growth environment exacerbated by falling prices and
In the three months ended March 31, 2015, we recorded sales of A 238.7 million (no adjustments), a net
profit of A 1.9 million and EBITDA of A 40.1 million (no adjustments). In 2014, we recorded sales of
A 846.0 million (Adjusted Sales(1) of A 853.4 million), a net loss of A 27.0 million and Adjusted EBITDA of
A 117.7 million. In 2013, we recorded sales of A 743.0 million (Adjusted Sales (taking SSW into account) of
A 875.5 million), a net loss of A 109.3 million and Adjusted EBITDA (taking SSW into account) of
A 112.6 million. For the year ended December 31, 2012, we recorded sales of A 868.0 million (Adjusted
Sales (taking SSW into account) of A 1,030.0 million), net loss of A 90.6 million and Adjusted EBITDA
(taking SSW into account) of A 122.5 million.
B.
OUR STRENGTHS
We draw on a number of strengths to support and participate in emerging and existing market
opportunities:
Strong market position in semiconductor silicon wafer manufacturing
We are the world’s third largest producer of semiconductor silicon wafers by both revenue and wafer area,
with, according to Gartner, 14 percent share of the global wafer market in 2013. We believe we have a
strong market position in all high volume wafer types and have been increasing our share in multiple wafer
diameters. Our strong position benefits from increasing demand for wafers (particularly for 300 mm
wafers) driven by increasing customer demand for semiconductor devices, which are required for high
growth applications such as mobile, storage, industrial and automotive. Overall, Gartner estimates
approximately 11 percent growth in wafer sales by area in 2014 as compared to 2013. For 2015, it appears
likely that demand will continue to grow, as forecasts indicate approximately three percent to five percent
area growth, according to Gartner and SEMI. From 2015 to 2018, Gartner currently estimates that the
growth in demand across the industry, expressed in area, will be approximately in the same range as
semiconductor content becomes even more pervasive across many consumer and industrial applications. In
recent years, the semiconductor silicon wafer industry has sharply reduced its capital expenditures, which
we believe resulted in only limited capacity increases, especially with regard to 300 mm wafers. We believe
that the wafer industry has limited incentives at current price levels to match the expected demand growth
with increased capacities. Therefore, the expected growth in demand may occur against relatively static
supply. Should this occur, we see the potential for stabilizing wafer prices—especially for 300 mm wafers—
in the short to medium term. This is also supported by Gartner’s forecasts.
The largest and fastest growing wafer market is in 300 mm wafers, according to Gartner. We are currently
able to manufacture up to 780,000 300 mm wafers per month from our highly competitive manufacturing
facilities. Our facilities have open shell capacity, meaning existing buildings and clean rooms that are
currently not utilized, but in which equipment can be installed, enabling us incrementally to increase our
manufacturing capacity. Should 300 mm wafer pricing improve to attractive levels, this shell capacity
provides us with a fast and cost-efficient expansion option on an opportunistic basis to increase capacity,
up to a total production output of one million wafers per month. To produce our high quality wafers, we
operate an established multinational manufacturing network consisting of facilities strategically located
near highly educated work forces and in close proximity to our customers. In the United States and Europe
we benefit from competitive electricity rates, and in Singapore we benefit from low labor costs. We have
concentrated our largest wafer capacities at our Singapore sites, where we operate among the world’s
newest and largest 200 and 300 mm facilities, lending support for our strong market position. In addition,
to further strengthen our manufacturing network and market position, we agreed with Samsung to become
a majority shareholder in our 300 mm joint venture in Singapore and to completely take over control of the
operations, effective as of January 24, 2014. Our presence on three continents also enables us to closely
collaborate with our customers on product design and development activities and shortens response times.
(1)
The Adjusted Sales, net income/(loss) and Adjusted EBITDA shown here have been adjusted to take into account the
consolidation of SSW beginning on January 24, 2014. See ‘‘Part 9: Selected Consolidated Financial Data’’ for further information
and the definition of Adjusted EBITDA, the reason for its inclusion and a reconciliation from net income/(loss) to Adjusted
EBITDA.
84
Technology and quality leader
We are a highly recognized technology and quality leader. We manufacture polished and epitaxial wafers
according to the most advanced design rules specified by our customers. We also believe that we are the
industry’s leading float zone wafer supplier. Our significant expertise in wafer manufacturing processes,
including multiple polishing and grinding technologies, integrated software-enabled tooling and flexible
equipment processes for various semiconductor wafer types and diameters augments our leading position.
We have leveraged our extensive 300 mm experience, accumulated since 1990, into the construction of
modern, high volume facilities in Germany and Singapore. We believe that our process technology
expertise and manufacturing excellence enables us to produce wafers of the highest quality in a cost
effective manner. We are a preferred technology development partner for leading semiconductor wafer
customers. We leverage joint development projects with customers and our own research efforts to keep
our manufacturing capabilities at least one generation ahead of the design rule currently implemented in
the market. For example, we are currently working closely with customers to commercialize the next design
rule, commonly referred to as ‘‘11nm.’’ As we always seek to be one generation ahead, in 2013 we started
to develop the next design rule, commonly referred to as ‘‘8nm,’’ with a commercialization target in 2017.
Starting in 2015, we plan to begin development of the ‘‘5nm’’ design rule, with a commercialization target
of 2019. Our highly specialized equipment base is essential to staying one generation ahead and, in our
belief, forms a high technology barrier making it difficult for new competitors to enter the 300 mm market.
Our manufacturing excellence is complemented by standardized processes across our multi-national
manufacturing network. This standardization allows for the transfer of best practices and enhances quality
control across our footprint, and helps to ensure our ability to achieve customer qualifications and to
optimize production between sites.
Supplier to all top 20 semiconductor wafer consumers with well-established relationships
Our more than 50 years of experience in the semiconductor and wafer industry has enabled us to forge
close relationships with each of the world’s 20 largest semiconductor wafer consumers. We have a
well-diversified customer base that covers all top semiconductor producers and two of these customers
each account for more than ten percent of revenue in 2014. Since the early 1990’s we have successfully
moved the focus of our activities closer to the greatest concentration of our customers, from Europe
towards Asia. As a result, we have been able to expand and intensify customer relationships with
technologically leading consumers of wafers around the world. We partnered with Samsung to develop the
world’s first 300 mm joint venture between a wafer producer and an electronics company in 2006. We have
entered into a long-term wafer purchase agreement with Samsung under which Samsung will purchase
more than half of SSW’s current production of 300 mm wafers in Singapore at what we believe is market
price. Excellent customer relationships enable us to capitalize on new opportunities in emerging
applications, while matching our offerings to changing customer needs. We believe our broad silicon wafer
portfolio, our global presence enabling us to respond to customer requests anytime and anywhere in the
world in less than 24 hours and providing our customers with a nearly 100% on-time delivery rate, and our
focus on customers and our technology leadership make us an ideal partner for our customers in meeting
the developing needs of the semiconductor industry and an attractive supplier compared to many
competitors. We believe that we are well positioned to capture new opportunities with existing customers
and to further diversify our customer base as a result of our technology leadership, customer service and
global manufacturing footprint. Our unrelenting commitment to quality and customer service is regularly
honored with highest ranks in supplier awards. For example, we have been awarded Intel’s Supplier
Continuous Quality Improvement (SCQI) or Preferred Quality Supplier (PQS) awards for five years in a
row, from 2010 through 2014.
Strong track record in efficiency improvement and cost reduction
We have a strong track record of successful cost reduction initiatives. We significantly reduced our costs in
recent years by optimizing our production footprint and excelled at strategic capacity management to meet
demand efficiently. These initiatives have successfully helped to maintain or improve margins despite
steady price declines and increased competition. We have implemented multiple measures designed to
marshal our resources (chiefly raw materials, manufacturing capacity and equipment, and our personnel)
ever more carefully and judiciously, allocating those resources to the most attractive market opportunities
and managing our production volumes to efficiently meet demand. These measures include multiple,
concurrent ongoing initiatives that are focused on the continual cost reduction of our fixed, variable and
services costs across our multinational manufacturing footprint. In addition, we have achieved significant
85
cost reductions in our polysilicon sourcing by leveraging processing yields and polysilicon quality. These
achievements combined, for example, allowed us to reduce the variable costs of our 300 mm operations in
Germany in total by over 40 percent since 2010 and by at least ten percent each year since 2011. In
addition, we successfully completed restructuring activities such as site closures and consolidations in
Japan, the United States and Germany in 2011 and 2012 to align our capacities in smaller-diameter and
200 mm wafers with current market trends. Our initiatives have secured total cost reductions of more than
cost), and excluding SSW) and additional savings of approximately A 55 million from 2013 to 2014 (based
on an application of the 2013 cost basis to 2014 volumes, adjustments to certain 2014 costs to reflect 2013
contractual and economic parameters (e.g. 2013 unit labor cost), and including SSW beginning as of
January 24, 2014). We intend to continuously follow our cost reduction roadmap to achieve further
efficiency improvements over the next several years. Our expertise in the use of automation, improvement
of processing yields, optimal use of polysilicon, and ability to react to demand volatility provides us with
ongoing initiatives to reduce costs and further increase productivity. Our disciplined capital allocation
across technologies, capabilities, and equipment upgrades allows for moderate ongoing capital expenditure
levels while still maintaining our leadership position.
Strategic supply of high-quality polysilicon at competitive cost
Our parent company, Wacker Chemie AG, is a leading supplier of hyperpure, high quality polysilicon for
electronic and solar applications. Our close relationship with Wacker has provided us with a strategic
partner to source our most important raw material (polysilicon) at competitive cost. To capitalize on this
strength going forward, we entered into a long-term supply agreement at arm’s-length terms for polysilicon
with Wacker. We believe this provides us with competitive pricing for high-quality polysilicon for the
majority of our polysilicon needs until 2020. There are also provisions in the agreement to extend the
supply relationship beyond 2020. Furthermore, our strategic partnership provides us with significant
competitive advantages through our close R&D collaboration on polysilicon and a timing advantage when
implementing new materials and processes compared to our competitors. We believe that this early-stage
access to the crucial raw material for semiconductor wafers provides us with a distinct advantage which we
strive to leverage to continually optimize our polysilicon cost and processing yields.
Experienced management team and highly skilled workforce
We believe we have one of the most experienced management teams in the industry. Our top six senior
managers (CEO, CFO and Vice Presidents of Technology, Marketing & Sales, Operations and
Engineering) have over 100 years of combined semiconductor and wafer industry experience. In addition,
we have a large and technologically proficient professional staff of over 400 engineers, of whom
approximately 30 have Ph.D.’s and over 125 focus solely on R&D.
C.
OUR BUSINESS STRATEGY
Our strategy is to leverage and strengthen our position among the leaders in the large and growing
semiconductor wafer industry. The key goals of our strategy are to:
Take advantage of growing demand in the semiconductor silicon wafer market
Following years of subdued demand growth for wafers from 2007 to 2013, according to Gartner, the wafer
market has returned to increased growth since early 2014, as demand for mobile, storage, industrial and
automotive applications grew strongly. We see evidence across a number of wafer types that this trend is
continuing. Gartner also notes that pricing is expected to stabilize following several consecutive years of
price declines.
As a consequence of historical subdued growth, capital investments in the semiconductor silicon wafer
industry were strongly reduced in recent years. This has led to an increase in industry capacity utilization,
or loading, for 300 mm wafers. We believe that our sound cost structure, manufacturing footprint and
proximity to and close relationships with our customers have positioned us to benefit from the expected,
more favorable supply and demand dynamics. We believe that we are well positioned to exploit these
market trends in a measured and cost efficient manner. We will seek to further optimize our capacity
utilization of existing facilities where appropriate to take advantage of the growth in the market.
86
Should 300 mm demand exceed our output capacity, we have existing 300 mm open shell capacity which
gives us a fast and cost-efficient expansion option to opportunistically increase capacity. However, we
currently consider investing in 300 mm capacity only when an attractive return on investment is probable.
We currently believe that the price of 300 mm wafers needs to increase significantly in order to justify new
investment. Maintaining our capital discipline under these market conditions is a key strategy.
Maintain and expand our technology leadership
We are a highly recognized technology and quality leader and manufacture polished and epitaxial wafers
according to the most advanced design rules specified by our customers. We intend to continue servicing
all leading design rules and process techniques and all high volume wafer and crystal types available or
under development on 200 mm and 300 mm platforms. We always seek to provide wafer qualities and
specifications that meet or exceed our customers’ wafer demands. We seek to maintain and expand on our
advanced product and process technology (e.g. floatzone crystals, double-side polishing, Ultimate
Silicon, and integrated software-enabled tooling) to stay at least one generation ahead of design rules
currently implemented in the market and support our customers development roadmaps on 3D stacking of
semiconductor-based memories (flash and DRAM).
As our customers’ needs evolve with advancing design rules and increasing degrees of integration, we
intend to leverage our long-standing expertise and experience to support the rapid development and
deployment of advanced semiconductor technologies and devices. We plan to continue to be an active
supporter of innovation in the semiconductor industry by offering wafers with enhancements to critical
features, including flatness, uniformity, and resistivity and with ever-fewer defects to help our customers
continually advance their products and solutions.
Continue our operational excellence and cost reduction roadmap
We believe that our lean operating structure allows us to quickly identify opportunities and implement
improvement measures. These improvements include debottlenecking measures and improving
automation, equipment allocation and capacity utilization. We believe we excel in quickly matching our
production footprint capabilities with evolving customer needs and intend to further optimize this ability.
We are committed to continuing our focus on cost reduction and productivity improvements, while not
compromising on the quality of our wafers or the service to our customers. We have established processes
and procedures to identify further improvement opportunities, such as leveraging statistical tools and
adopting proven lean management techniques, which we refer to as our ‘‘cost reduction and productivity
roadmaps.’’ We intend to further improve our operational excellence by selectively investing in technology
and equipment upgrades intended to enhance our manufacturing capabilities and streamline our
performance efficiencies. We also intend to enhance our cost position as we implement multiple measures
designed to allocate our resources to the most attractive market opportunities and manage our production
volumes to meet demand efficiently. These measures include multiple, concurrent initiatives that are
focused on the continuous cost reduction of our fixed, variable and services costs across our multinational
manufacturing network. We believe that our expertise in the use of automation, polysilicon, improvement
of processing yields and our ability to quickly react to demand volatility will provide us with ongoing
opportunities to further reduce costs and increase productivity.
Maintain our quality leadership
We succeed in serving all top 20 leading semiconductor wafer consumers by leveraging our wealth of
experience with over 50 years of servicing the semiconductor industry. We are committed to delivering the
highest quality customer service and providing customers with a single, local access point for all products
and all sites across our global manufacturing network. We intend to further enhance our established
quality assurance programs by focusing on our dedicated service and support staff. This enables us to
respond quickly to the changing requirements and product cycles of our customers. We strive to continue
to focus on our long-term relationships with all our major customers, helping us address potential issues or
changing needs quickly and proactively. We intend to leverage our broad wafer portfolio to increase our
customer penetration and to improve our global sales, design and technical support. As a result of our
customer service, technology leadership and global manufacturing footprint, we believe that we are well
positioned to capitalize on emerging opportunities with both new and existing customers.
87
Focus on improved financial performance and cash flow generation
We have established a strong track record in efficiency improvements and cost reductions. Our Adjusted
EBITDA has been relatively stable in the past three years—ranging from a high of A 122.5 million in 2012
and dipping to a low of A 112.6 million in 2013 before increasing slightly in 2014 to A 117.7 million—despite
a low growth environment exacerbated by falling prices and increased competition. We intend to further
optimize our cost position and increase productivity to improve our financial performance by following our
cost reduction and productivity roadmaps and continuing to integrate our recently consolidated SSW
operations. Our cost reduction measures currently implemented and planned for 2015 and beyond include
polysilicon price reductions, continuous optimization of polysilicon usage, further automation of 300 mm
production process, increasing Czochralski, or ‘‘CZ,’’ crystal growth process yields by investment in new,
large crystal pullers, supply cost reductions and reduction of support functions. We further plan to reduce
our indirect staff through early retirement, voluntary departures and transfers to Wacker Chemie AG and
other measures to increase productivity. In this connection, we have contractually agreed with Wacker
Chemie AG to transfer (without recourse) up to 500 of our employees at our German production sites to
Wacker Chemie AG. The first transfers began in 2014 and will continue through 2019.
While we make selective investments in technology and equipment to improve operational performance,
we plan to maintain our capital discipline and currently consider investing in capacity only when we believe
that an attractive return on investment is probable. We believe that stable or even slightly declining prices
coupled with our continuous efforts to improve performance and capital discipline contribute positively to
our cash flows. In addition, we believe that our cost reduction and productivity roadmaps will help us
maintain sustainable levels of cash flows even if faced with more challenging market conditions, better
positioning us for future changes in the wafer industry.
D.
HISTORY
Siltronic AG traces its roots back to Wacker Chemie AG. Before the founding of our company in 1995,
Wacker Chemie AG had already participated in driving the development of the semiconductor silicon
wafer market. In the course of our history, we have been pioneers with respect to a number of industry
innovations, such as when we shipped the first commercial 300 mm wafers in 2000. Supported by leading
technology and innovation, and our commitment to our customers, we have been able to maintain a
leading position over our entire lifetime. Due to our experience with historically cyclical markets, driven
largely by variations in demand for personal computers, we have honed our skills in identifying and
capitalizing on cost reductions and have a strong track record of operational excellence. Prior to this
Offering, we reported our operations as a business segment of Wacker Chemie AG.
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The table below summarizes our key achievements and milestones of our history:
Year
Achievement / milestone
1953
1958
1959
1961
1962
1968
1978
1984
1990
1994/1995
1995
1995
1996
1997
1998
1999
2002
2002
2004
2004
2006
2008
2011
2013
2014
Start of research and development in high-purity silicon
Start of semiconductor production
First float-zone purification facility is commissioned at the new high-purity silicon plant
High-purity silicon facilities commence large-scale industrial production
Development of the first semiconductor silicon wafer
Foundation of Wacker-Chemitronic Gesellschaft für Elektronik-Grundstoffe mbH
(‘‘Wacker-Chemitronic’’)
Foundation of Wacker Siltronic Corporation in Portland (USA)
First 200 mm wafers produced at Wacker-Chemitronic
First 300 mm wafer research and development projects
Wacker-Chemitronic, as sole shareholder, establishes our company as Wacker Siltronic
Gesellschaft für Halbleitermaterialien mbH
Wacker-Chemitronic contributes its wafer business to our company
Acquisition of the Freiberger Elektronikwerkstoffe Produktions- und Vertriebsgesellschaft
mbH, Freiberg, which was merged into our company on January 8, 1996
Our company (Wacker Siltronic Gesellschaft für Halbleitermaterialien mbH) is converted
into a stock corporation under the name of Wacker Siltronic Gesellschaft für
Halbleitermaterialien AG
Foundation of Wacker Siltronic Singapore Pte. Ltd
Commissioning of the first section of the 300 mm pilot production line
Start of production at our Singapore manufacturing plant
Start of construction of the new 300 mm semiconductor silicon wafer production line in
Freiberg
Change of our company name to Wacker Siltronic AG
Change of our company name to Siltronic AG
Start of production at the 300 mm semiconductor silicon wafers in Freiberg
Foundation of our joint venture Siltronic Samsung Wafer Pte. Ltd. (now: Siltronic Silicon
Wafer Pte. Ltd.) with Samsung. Started construction of a 300 mm wafer fab in Singapore
Jan 30, 2008, 1st wafer shipped out of joint venture
Extension of 300 mm wafer production to 230k wafers per month in Singapore
Extension of 300 mm wafer production to 325k wafers per month in Singapore
Acquired majority stake (78 percent) and gained full control in Siltronic Silicon Wafer
Pte. Ltd. in Singapore
We have made a number of strategic investments throughout our history to expand our product portfolio,
global footprint and customer base. For example, in early 2014, we acquired an additional 28 percent
interest in Siltronic Silicon Wafer Pte. Ltd. (SSW), increasing our total interest to 78 percent. SSW is a
leading edge 300 mm wafer site with a current monthly production capacity of approximately 330,000
wafers. In 2004, production of 300 mm wafers began at our facility in Freiberg, which has a monthly
capacity of approximately 280,000 wafers. Both those sites and our site in Burghausen are capable and
qualified for the latest design rules—we are currently commercializing the next design rule commonly
referred to as ‘‘11nm.’’ We have also made significant investments in our 200 mm wafer production at our
sites in Portland, Oregon, USA and Singapore.
E.
WAFER PORTFOLIO
AND
APPLICATIONS
Our semiconductor silicon wafers are used as the base substrate for the manufacturing of various types of
semiconductor devices used in computers, smart phones, medical devices, tablets and other mobile
electronic devices, as well as cars, trains and other consumer and industrial products. We offer customized
semiconductor silicon wafers with a wide variety of parameters and in varying sizes to satisfy numerous
specifications required by our customers. Most of our sales are generated from 300 mm diameter
semiconductor silicon wafers and, to a lesser degree, 200 mm diameter wafers. We also manufacture
semiconductor silicon wafers in sizes less than 200 mm in diameter. Due to the high cost of implementing
manufacturing and our expectations with respect to the limited profitability for 450 mm wafers, we do not
expect customer demand for such wafers. We cooperate closely with our customers and expect to tailor our
production and capacity of wafer sizes to reflect changing markets.
89
Semiconductor silicon wafer types are typically defined by their crystal properties, diameter and finishing.
The latter ranges from cut, lapped, and etched (‘‘CLE’’), to polished, thermally treated (annealed) or with
depositions, mostly epitaxial. Boron, phosphorous, arsenide and antimony (referred to as ‘‘dopants’’) are
used in minute amounts in order to alter the electrical properties of the silicon. For special applications,
neutron-doped ingots are also processed by means of irradiation in nuclear reactors. In 2013, we supplied
over 2,000 different wafer specifications with an extremely wide range of wafer parameters. The following
table provides information on our main wafer types by major device types, presenting key parameters
including the crystallization process, the finishing and the wafer diameter:
Device Type
Micro-processors
Memory . . . . . .
Logic/ASIC . . . .
Analog . . . . . . .
Discrete . . . . . . .
Our Main Wafer Types
Diameter
Thermally
in mm
CLE(3) Polished treated Epitaxial
Design
rule in nm FZ(1) CZ(2)
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(1)
Float zone.
(2)
Czochralski.
(3)
Cut/lapped/etched.
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The table below provides an overview of the products produced and approximate capacity at each of our
facilities as of December 31, 2014 (unless otherwise indicated):
Site
Silicon Monocrystals
Wafer Diameters and Capacities (in wafers/month)
Burghausen, Germany .
FZ from 76 to 200 mm
ǉ 150 mm
Freiberg, Germany . . . .
Portland, USA . . . . . . .
Singapore . . . . . . . . . .
CZ from 125 to 300 mm
CZ from 125 to 300 mm
—
CZ with 300 mm
300
300
200
200
300
mm
mm
mm
mm
mm
1,000,000 units (150 mm
equivalents)
170,000 units (shell 200,000)
280,000 units (shell 300,000)
230,000 units
380,000 units
330,000 units (shell 500,000)
Polished Wafers
Our polished wafers are used in a wide range of applications, including memory, analog, logic, RF devices,
digital signal processors and power devices. This wafer type is a highly refined ultra-low defect crystal that
has a polished ultra-flat and ultra-clean surface. We manufacture polished wafers with a chemicalmechanical polishing process that removes defects and leaves an extremely flat wafer with a mirror-like
surface. Wafer flatness and cleanliness requirements, along with crystal perfection and customer specific
parameter tuning, have become increasingly important as semiconductor devices become more complex
and transistors decrease in size.
We offer various types of polished silicon wafers with diameters ranging from 125 to 300 mm. Our polished
wafers are manufactured with the CZ crystal growth process. Depending on the customer’s needs, different
dopants are added, such as boron, phosphorus, red phosphorus, arsenic and antimony, in order to change
the electrical properties of the silicon. We also produce argon-annealed wafers with a diameter of 300 mm.
The special manufacturing processes result in the absence of certain defects. To produce an argonannealed wafer, specially engineered substrates are required. This is achieved through a special thermal
process that controls the precipitation of the intrinsic oxygen in these wafers to meet specific customer
requirements.
Epitaxial Wafers
The specific composition of epitaxial wafers enables them to meet extremely exacting quality standards.
Therefore, epitaxial wafers are mostly used for microprocessor applications as well as for advanced and
highly integrated semiconductor devices particularly in the foundry industry. Epitaxial wafers are made
from polished substrates by adding one or more monocrystalline silicon layers on top of the polished
surface, using a chemical gas deposition process.
90
Typically, the epitaxial layer has different electrical properties from the underlying wafer. In contrast to
polished wafers, the epitaxial layer provides our customers with circuit elements, each with different
characteristics, and gives our customers the ability to tailor the wafer to the specific demands of the device.
These characteristics make the finished semiconductor device more reliable. This results in greater
efficiencies during the semiconductor manufacturing process and ultimately allows for more complex
semiconductor devices. We offer epitaxial wafers with diameters from 125 to 300 mm. Customized
substrate and epitaxial layer characteristics are available to meet various applications and customer needs.
Float Zone Wafers
The float zone method of silicon crystal production allows for the production of an ingot that has
considerable advantages for our customers. In particular, we have focused on continually lowering the total
resistivity variations of our FZ wafers. Due to the absence of oxygen in the molten silicon during the FZ
process, certain impurities, such as thermal donors and oxygen precipitates have been eliminated. This
produces a semiconductor silicon wafer that has extremely stable resistivity performance, high voltage
capabilities and high carrier lifetimes. FZ wafers are primarily used for power applications, in particular
within the mobile infrastructure and automotive industry.
Our years of float zone experience coupled with the robust numerical simulation group we have developed
over time enable us to innovate and improve our wafers for our customers. While 200 mm silicon crystals
have been grown using the CZ method since the mid 1980’s, the technical limit in FZ crystal pulling using
the CZ method was limited to 150 mm for many years. In 2002, we succeeded in pulling 200 mm FZ ingots
and became the first semiconductor silicon wafer manufacturer worldwide to produce 200 mm FZ wafers.
Since then, we have continued to invest in this capability and now run volume production.
In addition, we have used our robust numerical simulation group to regulate the flow of dopants into the
silicon melt in order to achieve the best resistivity uniformity currently possible with our production
methods. This has especially been the case in the center of the FZ wafer where variation is highest.
Other Specifications
We also offer additional specifications for specialized or discrete applications. For example, our Ultimate
Silicon is a highly specialized 300 mm wafer for leading-edge CMOS applications such as DRAM and
flash memory devices. We can also provide our customers with wafers that have an asymmetric tailored
edge shape, epitaxial wafers with various degrees of tolerance and thickness and other products, including
high reflectivity (HiREF) and PowerFZ products.
F.
CUSTOMERS
We primarily sell our products to all of the major semiconductor manufacturers in the world, including
integrated device manufacturers and pure-play semiconductor foundries, and to a lesser extent, leading
companies that specialize in wafer customization. Our top 10 customers, by sales for the year ended
December 31, 2014, set forth in alphabetical order, were: Fairchild Semiconductor, Infineon Technologies,
Intel Corporation, Micron Technology, Samsung, SK Hynix, STMicroelectronics, Taiwan Semiconductor
Manufacturing Company (or TSMC), Texas Instruments and United Microelectronics Corporation. We
have had relationships with all of our top 10 customers for more than 10 years. In the year ended
December 31, 2014, Samsung accounted for approximately 14 percent and TSMC accounted for
approximately 13 percent of our sales to non-affiliates. No other customer accounted for more than ten
percent of our sales to non-affiliates during the year ended December 31, 2014.
91
Our customers are located primarily in the major semiconductor manufacturing regions throughout the
world. The following table presents a summary of the percentage of our sales to non-affiliates by country/
region, based on the location of the customer, for the years ended December 31, 2014, 2013 and 2012:
Percentage of Net Sales
to Non-affiliates
For the Years Ended
December 31,
2014
2013(1)
2012(1)
Asia excluding Taiwan and Japan . . . .
Taiwan . . . . . . . . . . . . . . . . . . . . . . .
Europe and Israel excluding Germany .
Germany . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . .
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37%
23%
12%
7%
14%
7%
27%
24%
15%
8%
16%
10%
28%
20%
15%
6%
18%
13%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
100%
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Excluding SSW.
G.
SALES
AND
MARKETING
We market our wafers primarily through a direct sales force. From a legal standpoint, only one entity sells
wafers in any given market. We have centralized product management to optimize pricing and mix. We
organize our sales force into five sales regions to ensure proximity to our customers. Our sales regions are
divided into the following regions: the United States, Europe, Japan, Taiwan and Other Asia Pacific. Our
sales offices are located in Portland (United States), Lyon (France), Milano (Italy), Burghausen
(Germany), Seoul (South Korea), Tokyo (Japan), Shanghai (China), Hsin-Chu (Taiwan) and Singapore.
Our products are sold in approximately 40 countries. A key element of our sales and marketing strategy is
establishing and maintaining close relationships with our customers, which we accomplish through key
account teams. The key account teams consist of employees from the sales, application technology, process
technology, quality assurance and logistics areas. We closely monitor changing customer needs and target
our research and development and manufacturing to produce wafers adapted to each customer’s specific
needs.
Sales to our customers are generally governed by purchase orders or, in certain cases, agreements with
terms of one year or less that include pricing terms and estimated quantity requirements. In addition, we
have longer term agreements with Samsung in connection with our subsidiary SSW and with another major
customer. Our customer agreements generally do not require that a customer purchase a minimum
quantity of wafers. Please see ‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—Because we do not
generally have long-term agreements with our customers and our customers are not obligated to purchase a
minimum quantity of wafers from us, we could fail to match our production with our customers’ demand. This
could result in a lower capacity utilization of our manufacturing facilities and fixed costs in excess of our
revenues and materially adversely affect our business, financial condition and results of operation.’’ We largely
sell our products directly to customers and to a lesser extent through companies of the Wacker group
acting as our agents and through third party distributors. In fiscal year 2014, we generated approximately
90 percent of our revenues through direct sales (approximately 35 percent through companies of the
Wacker group acting as our agents) and approximately ten percent of our revenues through third parties.
We also deliver our products to warehouses that have been set up at customer sites or at another site
designated by the customer. The customer then draws the products from the warehouse as needed. Under
certain supply relationships, particularly where deliveries are made to consignment warehouses, we have
agreed to provide fixed (maximum/ minimum) quantities.
H.
RESEARCH
AND
DEVELOPMENT
The semiconductor silicon wafer market is characterized by continuous technological development and
product innovation. We employ more than 400 engineers worldwide, including our research center in
Burghausen. Our process technology and systems engineering units are in place at all sites and are
responsible for the implementation of new process steps, the qualification of wafer specifications and the
continuous improvement of equipment and processes.
92
We devote a significant portion of our development resources towards enhancing our leading position in
the field of crystal pulling technology. Our wafer technologies are developed according to the most
advanced design rules specified by our customers. Current developments are aimed to meet new
specification (e.g. advanced flatness and purity) requirements of our customers. We also continue to focus
on developing finishing processes beyond polishing such as epitaxial deposition. In addition, we invest in
process design advancements to drive cost reductions and productivity improvements.
In the areas of research and development, we cooperate closely with our customers and suppliers and with
universities in developing advanced solutions for the semiconductor silicon wafer industry. Close
collaborations with research institutes and universities support our research and development activities.
Our latest R&D program consists of research into gallium-nitride-on-silicon (‘‘GaN-on-Si’’) aimed at
power applications, mobile devices and opto-electronics (primarily LEDs). General benefits of GaN-on-Si
wafers include lower total costs, easier scalability to larger diameters, and compatibility with
semiconductor silicon wafer based CMOS manufacturing processes. Devices benefiting from GaN devices
in power electronics are not limited to power converters for solar or power supplies for consumer
electronics, but also include devices for automobiles, trains, medical, etc.
I.
MANUFACTURING
To meet the global demand for our semiconductor silicon wafers, we have established a global
manufacturing network consisting of facilities located in Singapore, Germany and the United States. We
have established our largest manufacturing facilities in Singapore to take advantage of low operating costs,
in particular low labor cost. All of our facilities are located in regions with highly educated work forces and
are in close proximity to our customers.
We have set up consistent tooling and common processes across our manufacturing sites in order to
facilitate the transfer of equipment and process improvements, qualification with customers and finally the
shifting of production between sites, for example, in the event of a bottleneck in capacity. This consistent
setup is also important since customers generally need to ‘‘qualify’’ each manufacturing facility for us to be
able to produce a specific product. This process typically takes six to twelve months, but it can take longer
for certain products and depends upon a customer’s requirements and situation. In many cases multiple
sites are qualified for a particular wafer specification to allow manufacturing flexibility.
Our semiconductor silicon wafer manufacturing process begins with hyperpure polysilicon. The polysilicon
is melted in a quartz crucible along with exactly defined and tailored amounts of electrically active
elements such as arsenic, boron, phosphorous or antimony. We then lower a silicon seed crystal into the
melt and slowly extract it from the melt as it counter rotates against the molten polysilicon. The resultant
body of silicon is called an ingot. The temperature of the melt, speed of extraction and rotation of the
crucible govern the size of the ingot, while the concentration of the electrically active element in the melt
governs the electrical properties of the wafers to be made from the ingot. This is a complex, proprietary
process requiring many control features on the crystal-growing equipment.
After the crystal ingot is grown, we grind the ingots to the desired size and slice them into thin wafers.
Next, we prepare the wafers for surface polishing with a multi-step process using precision wafer
planarization machines, edge contour machines and chemical etchers. Final polishing and cleaning
processes give the wafers the clean and ultraflat mirror polished surfaces required for the fabrication of
semiconductor devices. We further process some of our products into epitaxial wafers by utilizing a
chemical vapor deposition process to deposit a monocrystal silicon layer on the polished surface.
93
The graphic below illustrates key steps in the manufacturing process for our 200 mm semiconductor silicon
wafers:
20MAY201506331409
J.
COST-
AND
EFFICIENCY-IMPROVEMENT INITIATIVES
We have a strong track record of successful cost reduction and efficiency improvement initiatives. We
significantly reduced our unit costs in recent years by enhancing our production footprint and improving
strategic capacity management to meet demand efficiently. These initiatives have successfully helped to
maintain or improve margins despite further price declines and increased competition. We have
implemented multiple measures designed to rationalize our use of resources, optimize those resources for
the most attractive market opportunities and manage our production capacity to efficiently meet demand.
These measures include multiple, concurrent ongoing initiatives that are focused on continuing to reduce
the cost of our fixed and variable costs across our multinational manufacturing footprint.
With our restructuring activities in 2011 and 2012 (site closures and consolidations in Japan, the United
States and Germany) we aligned our capacities in smaller diameter and 200 mm wafers with current
market trends. As a result, our fixed costs decreased significantly and capacity utilization at our remaining
sites increased. Ongoing initiatives, such as those related to the services agreements and labor support
agreement with Wacker Chemie AG, address the reduction of our indirect staff and other fixed costs.
These initiatives have visible effects on our fixed cost position, as described below.
In addition, we have achieved substantial success in lowering our variable costs. Major progress has been
made with regard to our polysilicon cost by leveraging processing yields, polysilicon quality, and declining
market prices. We and SSW have agreed to long-term supply contracts with Wacker Chemie AG for
polysilicon through 2020 and 2019, respectively, which include price reductions for 2015. We place a special
focus on our supply cost, where a wide range of initiatives regarding consumption of materials and
supplies, process optimization, supplier selection and purchase price reduction have contributed to the
positive trend in a major cost item. The improvement in the cost of materials has also been accompanied
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by the continued increase of both people- and asset-efficiency and has enabled us to raise the output of
existing facilities with an increasingly smaller number of direct staff.
Combined, these achievements have reduced the variable costs of our 300 mm operations in Germany in
total by over 40 percent at least ten percent each year since 2011. On a group level, our cost reduction
roadmap has led to total ongoing cost reductions (excluding one-time costs such as restructuring expenses
for site closures) of more than A 80 million from 2012 to 2013 (based on an application of the 2012 cost
basis to 2013 volumes, adjustments to certain 2013 costs to reflect 2012 contractual and economic
parameters (e.g. 2012 unit labor cost), and excluding SSW) and additional savings of approximately
cost), and taking into account the cost savings of SSW from 2013 to 2014). Below is a chart illustrating our
cost reductions in 2013 and 2014 by approximate proportion per category:
Reduction in polysilicon cost
Reduction of electricity and supply cost
Productivity improvement (direct staff)
Reduction of indirect staff
Yield improvements
Site closures
2014
2013
19MAY201506260106
We expect to continue to enhance the efficiency and cost position of our wafer production through further
improvements in manufacturing and to follow our cost reduction roadmap as we integrate the recently
consolidated SSW operations.
Our cost reduction measures currently implemented and planned for 2015 and beyond include:
•
Polysilicon price reduction in 2015
•
Supply cost reduction by selection of new vendors, recycling initiatives and process changes
•
Automation of 300 mm lines in Germany and other measures to increase productivity
•
Continuous optimization of the polysilicon supply and usage
•
Czochralski crystal yield increases through investment in new, large crystal pullers and other measures
•
Reduction of staff through attrition, early retirement, voluntary leaves and transfers to Wacker
Chemie AG
•
Reduction of support functions
We expect that a successful continuation of our cost reduction roadmap will have a positive contribution on
both our operating result and EBITDA. We expect our capital discipline in recent years to further reduce
depreciation. As the level of our investment (capital expenditures) continues to be lower than our
depreciation charges, we expect operating result to benefit.
For risks associated with our cost- and efficiency-improvement initiatives and our cost reduction roadmap,
please see ‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—We have in the past and may in the
future implement initiatives designed to achieve cost reductions and to manage our production capacity to meet
demand efficiently. We may fail to realize the full benefits of, and could incur significant costs relating to, any
such initiatives.’’
K.
RAW MATERIALS
The principal raw material used in our manufacturing process is polysilicon. Prices for polysilicon have
been volatile in the past and may increase in the future (see ‘‘Part 1: Risk Factors—A. Risks Relating to Our
Business—Polysilicon, our key raw material, as well as other ancillary materials, machinery and replacement
parts, are offered by only a limited number of suppliers, exposing us to risk of delivery disruptions and price
95
increases’’). We purchase our polysilicon primarily from the Wacker group pursuant to a polysilicon supply
agreement between Wacker Chemie AG and SSW and between Wacker Chemie AG and Siltronic AG.
According to the polysilicon supply agreement with Siltronic AG, Wacker Chemie AG will supply
90 percent of the Company’s polysilicon requirements through 2020. The agreement with SSW has a fixed
term until December 31, 2019 pursuant to which Wacker Chemie AG will provide 100 percent of SSW’s
polysilicon requirements from January 1, 2015 through December 31, 2019. From January 1, 2020 onward,
SSW’s minimum polysilicon purchase obligation is reduced to 70 percent of its requirements. See ‘‘Part 15:
Certain Relationships and Related Party Transactions—A. Relationship with Wacker Chemie AG.’’
We purchase the remainder of our polysilicon requirements either from Wacker Chemie AG or from
alternative providers. If for any reason Wacker Chemie AG is unable to meet our demand for polysilicon,
we expect to be able to obtain our polysilicon requirements from alternative suppliers. However, we may
experience manufacturing delays, an increase in our costs relating to obtaining polysilicon or a decrease in
our manufacturing throughput and yields if we are required to seek alternative suppliers (see ‘‘Part 1: Risk
Factors—A. Risks Relating to Our Business—Polysilicon, our key raw material, as well as other ancillary
materials, machinery and replacement parts, are offered by only a limited number of suppliers, exposing us to
risk of delivery disruptions and price increases’’).
Based on expenditures for raw materials, ancillary materials and operating supplies in fiscal year 2014, our
most important consumables include quartz crucibles, shipping boxes for semiconductor silicon wafers,
chemicals, gases, graphite parts, grinding powder, polishing slurry, quartz parts and other consumables. In
addition, we purchase machinery and replacement parts from suppliers for our production plants. For
certain machinery and replacement parts, we only focus on one source of supply. However, most of the
machinery and replacement parts can be qualified and purchased from alternative suppliers.
Some suppliers have set up consignment warehouses with us or our subsidiaries.
L.
SSW
The following section provides an overview of our 300 mm wafer production facility subsidiary SSW, our
relationship with SSW’s non-controlling shareholder, Samsung, and a wafer purchase agreement between
SSW as seller and Samsung as purchaser.
In July 2006, our wholly-owned Dutch subsidiary, Siltronic Holding International B.V. (‘‘Siltronic
Holding’’), entered into a joint venture agreement (as amended in March 2013 and January 2014, the
‘‘SSW Agreement’’), with Samsung. Pursuant to this agreement, Siltronic Holding and Samsung originally
established SSW as a joint venture company organized under the laws of Singapore for the purpose of
setting up, developing and operating a large scale production facility for 300 mm semiconductor silicon
wafers in Singapore and supplying those wafers to Samsung and other customers. Based on an amendment
agreement dated January 24, 2014, Siltronic Holding increased its share in SSW from 50 percent to
78 percent by means of a capital increase, pursuant to which it acquired 750 million shares in SSW. This
resulted in Siltronic Holding obtaining control of SSW and SSW being fully consolidated in our Group.
In connection with the establishment of SSW, several additional agreements were entered into including,
among others:
•
the SSW Polysilicon Supply Agreement (as described in more detail below under ‘‘Part 15: Certain
Relationships and Related Party Transactions—A. Relationship with Wacker Chemie AG—SSW
Polysilicon Supply Agreement) between Wacker Chemie AG and SSW, pursuant to which Wacker
Chemie AG will supply polysilicon to SSW,
•
the Samsung Wafer Purchase Agreement (as described in more detail below under ‘‘—Samsung Wafer
Purchase Agreement) between SSW and Samsung, pursuant to which SSW will supply more than half
of its production capacity of 300 mm wafers per month to Samsung, and
•
a technology license agreement between SSW and us, pursuant to which we will transfer certain
technology to SSW.
Although Siltronic Holding has majority voting rights with respect to SSW, there are certain activities
which require unanimous consent of the shareholders. These include, among others:
•
liquidation of SSW or its merger into, or consolidation or amalgamation with, any other company, or
the relocation or closure of the facility,
96
•
transfer or pledge of at least a substantial part of SSW’s business, facility or assets to another person
or entity,
•
any issuance of shares, equity-linked securities, bonds and other similar instruments to the extent they
are offered to third parties which are not members of the Samsung group or our Group,
•
any lending to or investing in any party by SSW,
•
change of the scope of SSW’s business, and
•
subject to certain exceptions, entering into, amending, or terminating any material contract or
material business transaction by SSW with any of its shareholders or their affiliates.
Siltronic Holding is entitled to have the expansion of the SSW facility put on the agenda of any general or
extraordinary meeting of the shareholders. If put on the agenda, this matter may be resolved by a simple
majority of the votes cast, as long as Siltronic Holding provides or raises at least 50 percent of the projected
funding required for such expansion in the form of equity, and the remaining portion of the projected
funding is provided in the form of third-party financing. Samsung has the right (but not the obligation) to
subscribe pro rata to any new shares issued for this purpose. Siltronic Holding will be required to subscribe
to any new shares in SSW if and to the extent that Samsung does not exercise its subscription rights.
Siltronic Holding also has the right to nominate two of the three directors of the board of directors of SSW
and to appoint the executive director (who is to serve as president) and the chief financial officer of SSW
(who is not to be a member of the board of directors). The board of directors has the power and authority
to make all policy decisions in respect of important business matters. Generally, all decisions of the board
of directors are made with a simple majority of the board of directors then in office. However, certain
matters can only be resolved by the unanimous vote of all directors of SSW, including, but not limited to:
•
certain transfers and/or certain licensing of, or any creation of a lien on, any intellectual property
owned by SSW,
•
subject to the SSW Agreement, entering into, amending or terminating any contract or business
transaction by SSW with any of its shareholders or shareholders’ affiliates, and
•
commencing or settling litigation, arbitration or other legal proceedings by or against SSW the subject
matter of which exceeds $ 5 million, unless such litigation, arbitration or other legal proceedings do
not affect the legitimate interests of the Samsung group companies.
In addition, before any distribution of dividends, SSW will make payments and establish reserves in respect
of the following (in order of priority):
•
capital maintenance expenditures of SSW,
•
crediting prepayments of Samsung and Siltronic Holding against deliveries of 300 mm wafers, and
•
on a pro rata basis, payment of interest and repayment of nominal amounts under the bridge loans
and shareholder loans.
Thereafter, if sufficient distributable retained earnings are available, 50 percent of the dividends are
required to be distributed as a dividend and the other 50 percent are required to be allocated to retained
earnings of SSW. Any other form of dividend requires the unanimous vote of all of SSW’s directors. The
distribution of dividends is also subject to the mandatory provisions of the laws of Singapore.
Until November 2016, neither Siltronic Holding nor Samsung (through Samsung Asia Pte. Ltd) may
transfer all or any portion of its shares in SSW or any interest therein to any party which is not a member
of our Group or the Samsung group, respectively, except with the prior written consent of the other
shareholder. The same applies to Siltronic AG and Samsung with regard to their respective shares in
Siltronic Holding and Samsung Asia Pte. Ltd. After November 2016, a shareholder that wishes to transfer
all or part of its shares or any interest therein must first offer to sell such shares to the other shareholder.
In no event may the selling shareholder transfer the shares to a competitor of the other shareholder.
Additionally, if Siltronic Holding is the shareholder seeking to sell shares to a third party, Samsung has the
right to sell its shares under the same conditions to the third party, subject to certain notice provisions, and
Siltronic Holding has the right to request Samsung to sell all (but not part) of its shares to the same third
party on the terms on which Siltronic Holding is selling its shares, subject to certain notification provisions.
Any party that breaches the provisions of the SSW Agreement relating to the transfer of shares must pay
significant liquidated damages to the non-breaching shareholder.
97
The SSW Agreement may be terminated, subject to complying with certain notice requirements, inter alia,
if the other party has committed a material breach of its obligations under the SSW Agreement and such
breach has not been remedied within 30 business days of receiving notice of the breach. If the SSW
Agreement is terminated, the parties will use commercially reasonable endeavors to reach an agreement as
to whether either of the parties will purchase and acquire the shares of the other party or take all actions
commercially reasonable to sell and transfer all shares of both parties to a third party at reasonable terms
and conditions. If a party declares in good faith that neither a sale to the other party nor to a third party as
described before has been successful, the parties will cause SSW to go into liquidation. If the SSW
Agreement is terminated as a consequence of one party’s liquidation, the terminating party will have the
right to purchase and acquire the other party’s shares at a price equal to their fair market value. In the
event of a dissolution of SSW, Siltronic Holding and Samsung must agree on the fair market value of SSW
and distribute the proceeds of dissolution proportionate to their respective shareholdings.
Siltronic Holding and Samsung have agreed to settle any controversy or claim regarding the SSW
Agreement by arbitration in Singapore. Furthermore, Siltronic Holding and Samsung have agreed to
indemnify and hold harmless each other and SSW from and against, and will reimburse each other or SSW
for, certain losses, expenses, damages and other liabilities arising out of or in connection with, or relating
to, any material breach of any obligations, representations and warranties or covenants under the SSW
Agreement, provided, however, that any lost profits, lost opportunities or any other indirect consequential
or incidental damages will be excluded from the scope of indemnification. The SSW Agreement is
governed by the laws of Singapore, without regard to conflicts of law provisions.
Samsung Wafer Purchase Agreement
In November 2006, SSW entered into a wafer purchase and sale agreement (as amended in August 2007
and February 2014, the ‘‘Samsung Wafer Purchase Agreement’’) with Samsung. Pursuant to the agreement,
Samsung will purchase from SSW, and SSW will supply to Samsung, more than half of its production
capacity of 300 mm wafers per month, unless the wafers fail to meet the terms and conditions in the
Samsung Wafer Purchase Agreement with respect to pricing, quality and on-time delivery. Samsung will
not be obligated to purchase wafers for a given month if: (i) the wafers provided by SSW do not meet the
requisite quality specifications, (ii) SSW invoiced Samsung at a price higher than that calculated in
accordance with the Samsung Wafer Purchase Agreement or (iii) SSW fails to deliver the committed
quantity of wafers in accordance with the applicable delivery schedule. If the wafers do not meet the
applicable quality standard, Samsung is required to use its commercial best efforts to purchase wafers up to
its minimum obligation and to use its commercially reasonable efforts to use wafers that did not pass
inspection as test or monitor wafers.
On the last business day of each calendar month, Samsung is required to provide SSW with a rolling
forecast of its expected order volumes covering a period of three months, starting one month ahead of the
date of such forecast. Pursuant to the Samsung Wafer Purchase Agreement, Samsung guarantees to SSW
that the actual order volume for the first month of the order forecast will not deviate by more than three
percent from the order forecast for the respective month.
If there is any change in SSW’s manufacturing, it is required to obtain written approval from Samsung
regarding the changes. Such approval may not be unreasonably withheld by Samsung.
The Samsung Wafer Purchase Agreement had an initial term until November 2016 that was automatically
renewed to November 2018. Subsequently, the agreement automatically renews for successive periods of
two years unless either party notifies the other party by giving two years written notice. Either party may
terminate the agreement, including (among other reasons) if the other party commits a material breach of
the agreement and fails to remedy such breach within 30 days after written notice from the non-breaching
party or if the SSW Agreement see (‘‘—L. SSW’’) is terminated by either party for any reason whatsoever.
SSW provides certain warranties under the Samsung Wafer Supply Agreement, including that the wafers
supplied to Samsung will be free of any defects in design, material and workmanship subject to certain
other conditions. For one year after delivery, if the wafers do not comply with the representations and
warranties contained in the Samsung Wafer Supply Agreement, SSW will be liable for putting Samsung in
the same position that it would have been in if the representations and warranties had been correct or had
not been breached. In addition, SSW has agreed to defend and hold Samsung harmless against all claims,
losses, liabilities and expenses associated with or based upon any claims arising out of any intellectual
property rights, including patent rights, of any third party relating to the wafers provided by SSW, subject
to certain limitations. SSW has also agreed to defend, indemnify and hold Samsung harmless against any
98
liability, loss, expense, damage or cost arising out of personal injury or death or property damage caused by
any defect in the wafers, subject to certain limitations. SSW’s aggregate liability under the Samsung Wafer
Supply Agreement with respect to any warranty, product liability and/or indemnity claims is limited in any
given calendar year.
M.
PROPRIETARY INFORMATION
AND INTELLECTUAL
PROPERTY
We place high priority on the patent protection of our own inventions. As of December 31, 2014, we own
approximately 350 inventions, of which approximately 110 are currently being used in production. Patent
applications have not yet been filed for 15 of these inventions, but 456 patent applications are currently
being examined by patent offices and we own in total 1,245 granted patents. Most of the active intellectual
property rights are located in Germany and Japan as well as in Singapore, South Korea, Taiwan, China and
the United States. The patent rights protect inventions connected to semiconductor silicon wafers and
processes for their manufacture, such as crystal pulling, cutting, lapping, polishing and epitaxial coating,
and annealing.
The table below sets forth the approximate number of our current German and foreign patents, including
patents in the United States that are scheduled to expire in the referenced periods:
Number of Patents
Scheduled to Expire
German
Foreign
During the Years Ended December 31,
2015
2020
2025
2030
- 2019 . . . . . .
- 2024 . . . . . .
- 2029 . . . . . .
and thereafter .
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24
51
75
35
101
196
432
331
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185
1,060
In Denmark, a competitor is currently challenging the validity of one of our patents. While we consider our
patents to be valuable assets, we do not believe that our overall operations are dependent upon any single
patent or group of related patents.
We have agreed to indemnify some of our customers against claims of infringement of the intellectual
property rights of others in our sales contracts with these customers. Historically, we have not paid any
claims under these indemnification obligations, and we do not have any pending indemnification claims
against us.
Trademarks
We hold registered trademarks on the word ‘‘Siltronic’’ in numerous countries throughout the world,
particularly in Europe and Asia, but not in the United States due to the fact that the registered trademark
‘‘Siltron’’ is held by a competitor, LG Siltron. On October 22, 2003, we entered into a co-existence
agreement with Siltron Inc., which has enabled both parties to continue using their respective company and
product names ‘‘Siltronic’’ and ‘‘Siltron,’’ and to maintain or register them as trademarks. Should any
complications arise, the parties have agreed to cooperate to rectify any possible confusion on the part of
third parties, without resorting to legal measures. In case, conflicts should arise in individual countries, we
may find that we need to change our company or brand names, which could lead to costs for such
changeover. No such problems have arisen since the conclusion of the co-existence agreement. We also
hold several other registered trademarks in numerous countries such as PowerFZ, and HiREF.
N.
ENVIRONMENTAL MATTERS
Our operations and facilities are subject to German, EU, Singapore, U.S. and Japanese laws and
regulations governing the protection of the environment and our employees, including rules governing
water discharges, the management and disposal of hazardous substances and wastes, and the cleanup of
contaminated sites. We could incur substantial costs, including cleanup costs, fines or civil or criminal
sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities
under these laws and regulations, or non-compliance with the environmental permits required at our
facilities. Potentially significant expenditures could be required in order to comply with environmental laws
that may be adopted or imposed in the future. In addition, we could be liable for violation of
environmental laws or regulations or cleanup costs at former facilities.
99
Our subsidiary Siltronic Corporation is currently addressing environmental contamination at, and
migrating from, its Portland, Oregon facility (the ‘‘Portland Property’’). In 2000 and 2004, the Oregon
Department of Environmental Quality (‘‘DEQ’’) issued orders requiring the investigation of releases of
certain contaminants, including trichloroethylene (‘‘TCE’’) that was formerly used by our subsidiary at the
Portland Property. The orders also required an assessment and the implementation of any necessary
control measures to prevent contaminants from continuing to enter into the Willamette River, which flows
next to the Portland Property. With approval of the DEQ, following extensive investigation that identified
two TCE-contaminated areas, in 2008 our subsidiary initiated remediation measures that significantly
reduced the TCE contamination at the Portland Property. While one area responded well to the
remediation measures, the second area has not responded as well. In 2012, the DEQ required our
subsidiary to address data gaps in the initial remedial investigation by preparing an investigation work plan
to characterize the nature and extent of the associated contamination in vapor, soil, and groundwater of
this second source area. The results of the investigation were submitted to the DEQ in 2013. The DEQ’s
response, which is expected to indicate whether further active remediation of TCE will be required or
whether long-term monitoring will be sufficient, is anticipated during 2015.
In addition to the TCE contamination, prior owners of the Portland Property caused releases of
manufactured gas plant (‘‘MGP’’) wastes, herbicides, pesticides, and petroleum products, and other
hazardous substances. These hazardous substances were also the subject of regulatory ordered
investigations. In 2009, the United States Environmental Protection Agency (‘‘EPA’’) jointly ordered a
prior owner of the Portland Property and our subsidiary to remove in-river sediment as an early action in
order to remedy the contamination caused primarily by MGP wastes. A draft of the sediment removal
action plan, which likely will involve removal of some of the bank along the Willamette River at the
Portland Property, is under review by the EPA. As a first step, the prior owner has installed and begun to
operate pump-and-treat extraction wells to collect contaminated groundwater near the riverbank on the
Portland Property. During 2015, the EPA is expected to determine the scope of the additional cleanup that
is required to address contamination at the riverbank and in nearby sediments. The prior owner will be
taking the lead in the removal action, but because the remedial work also will address TCE contamination,
our subsidiary has agreed to bear a small part of the design costs and anticipates that it will be responsible
for a small part of the cleanup costs.
Furthermore, in December 2000 the EPA added the Portland Harbor (which includes an approximately
16 km segment of the Willamette River lined with many current and former industrial properties) to its
Superfund National Priorities List due to contaminated sediments. EPA has identified numerous entities,
including our subsidiary, as potentially responsible parties (‘‘PRPs’’) that may have liability for the
contamination. Our subsidiary participates as a funding but non-voting member of a committee of certain
PRPs that has prepared a draft remedial investigation and feasibility study identifying ten possible
remedial alternatives including their projected costs. The draft, which is currently under review by the
EPA, does not determine who is responsible for the liabilities or their respective shares of the liabilities,
which will subsequently be determined in a separate process, or the precise nature or extent of the
required remediation. Accordingly, at this time, it is not clear whether and to what extent our subsidiary
will be held liable for costs and damages relating to the Portland Harbor Superfund Site.
Our subsidiary has also been invited by the Portland Harbor Natural Resource Trustee Council (‘‘Trustee
Council’’), to participate with other Portland Harbor PRP’s in performing a ‘‘cooperative natural resource
injury assessment’’ of the Portland Harbor Superfund Site. The Trustee Council includes several Native
American tribal governments and federal agencies including the National Oceanic and Atmospheric
Administration (‘‘NOAA’’). Our subsidiary currently participates in an early settlement process seeking an
expeditious and reasonable resolution of any natural resource damage liabilities, and it is awaiting a
settlement offer from the Trustee Council. Our subsidiary’s insurance carrier is involved and has approved
the strategy.
Our subsidiary has insurance coverage that has provided reimbursement for the majority of the defense,
investigation and remediation costs that our subsidiary has incurred to date. Although substantial coverage
remains, future defense, investigation and remediation costs may not be fully reimbursed by the insurance
coverage. Our subsidiary is currently in litigation with its primary insurer in an effort to seek
reimbursement for its portion of the costs relating to environmental issues at the Portland Property. The
most recent ruling in this litigation occurred on October 28, 2014, and favorably ruled that the primary
insurer has a duty to defend our subsidiary from actions associated with property damage under an
insurance policy that was issued prior to its operations at the Portland Property.
100
Because there have not been determinations of the nature or extent of the further investigations and
remediation that may be required, the amount of any natural resource damages, or how the costs of the
investigations and remediation and natural resource damages will be allocated among the various
responsible parties, we believe that it is not possible to reasonably estimate the amount or range of costs
which it is likely or reasonably possible that our subsidiary may incur in connection with the contamination
at the Portland Property and the Portland Harbor Superfund Site. However, if these costs are not fully
covered by our insurance coverage, they could have a material adverse effects on our business, net assets,
financial condition, cash flows, or results of operations. While our subsidiary has resisted actions that could
impact its infrastructure at the Portland Property, future regulatory actions could also adversely affect this
infrastructure. Also see ‘‘Part 1: Risk Factors—A. Risks Relating to Our Business—We are subject to
environmental laws and regulations, which could require us to incur environmental liabilities, increase our
manufacturing and related compliance costs or otherwise materially adversely affect our business, net assets,
financial condition and results of operations.’’
As of December 31, 2014, compliance with foreign, federal, state and local provisions which have been
enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the
protection of the environment, has not had a material effect on our business, financial condition or results
of operations, and we do not currently expect any known conditions to have a material impact on our
business in the future. Furthermore, Wacker Chemie AG is a signatory to the Responsible Care Global
charter, an initiative of the international chemical industry under the leadership of the International
Council of Chemical Association for the continued improvement of environmental health and safety
performance and the advancement of sustainable development. Wacker Chemie AG has committed to
facilitate the extension of Responsible Care throughout the Wacker group which continues to include
Siltronic AG and its subsidiaries following this Offering. In line therewith, we will, thus, continue to apply
the high standards of safety and environmental compliance reflected by Responsible Care at our
production sites and in our production processes worldwide.
O.
PROPERTIES
Our principal executive offices, i.e. our headquarters, are located at Hanns-Seidel-Platz 4, 81737 Munich,
Germany, and our telephone number at that address is +49 89 8564-3000.
The following table sets forth the location and approximate size of each of our operating facilities.
Location
Owned/Leased
Approximate Size
Munich, Germany . . . . . . .
Leased
Office space of 963 sqm
Burghausen, Germany . . . .
Long-term leasehold
Land area of approximately 39,593 sqm
(of which approximately 36,647 sqm are
developed)
Leased
developed)
Freiberg, Germany . . . . . .
Owned
Land area of 172,514 sqm (of which
approximately 103,279 sqm are
developed)
Singapore 200 mm site . . .
30 years non-cancellable lease
with 30 years renewal option
48,480 sqm
Singapore 300 mm site . . .
30 years non-cancellable lease
with 30 years renewal option
71,156 sqm
Portland, USA . . . . . . . . .
Owned
developed)
We believe that our existing facilities and equipment are well maintained, in good operating condition and
are adequate to meet our current requirements.
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P.
EMPLOYEES
As of March 31, 2015, we had 4,103 employees worldwide. Since March 31, 2015, there has been no
material change in the number of our employees. Among our employees, approximately 160 work in
administrative functions (e.g. accounting, human resources, purchasing, site management), approximately
1150 in technology, engineering and maintenance, including over 400 engineers (approximately 30 of
whom have Ph.D.’s and over 125 focus solely on R&D). We also employ approximately 50 staff within our
marketing and sales organization spread across five sales regions and the remaining 2,800 or so employees
are responsible for supply chain, production and quality control.
2014
(1)
Siltronic AG . . . . . . . . . . . . . .
Siltronic Corp, USA . . . . . . . . . .
Siltronic in Singapore and Japan .
Total Employees of our Group . .
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As of December 31,
2013
2012
2,713 2,825
383
382
1,067(2) 537
4,165(2) 3,746
(1)
Does not include two board members in 2014 and 2013 and three board members in 2012 and 2011.
(2)
Includes approximately 600 employees from SSW.
3,020
397
558
3,978
2011
3,169
780
1,022
4,974
In Germany, local law requires our participation in works councils. Furthermore, with regard to our
German production sites, we have collective bargaining agreements as well as company-specific collective
bargaining agreements with the Industrial Union for Mining, Chemicals, and Energy (Industriegewerkschaft
Bergbau, Chemie, Energie) and the competent employer’s association. We had no material work stoppages
at any of our facilities due to labor union activities in recent years and consider our employee relations to
be good.
We have made great strides in increasing our productivity levels through automation and capability
improvements and have been able to reduce our work force from a level of approximately 7,000 employees
in 2003. We continue to make efforts to reduce costs and increase productivity. Our productivity in 300 mm
wafer production almost doubled over the last five years as measured by wafer area per hour paid.
Discounting the SSW work force, the number of our employees was reduced by approximately
1,350 employees since the end of 2011. In addition, in connection with our cost reduction roadmap and the
reduction of our workforce in Germany, we entered into a labor support agreement with Wacker Chemie
AG, whereby Wacker Chemie AG will take over (without recourse) up to 500 employees from Siltronic AG
over a span of six years starting 2014 against an upfront payment in the amount of A 39 million paid by us
in 2014. Under certain circumstances, Wacker Chemie AG may not be able to fulfill its obligations under
the agreement and has agreed to make a compensation payment to us in an amount of A 78,000 for each
employee not taken over. For details, see ‘‘Part 15: Certain Relationships and Related Party Transactions—
A. Relationships with Wacker Chemie AG—Labor Support Agreement.’’
Q.
REGULATORY MATTERS
We are subject to environmental, health and safety regulations in Germany, the U.S., Japan and Singapore.
R.
LEGAL PROCEEDINGS
We are involved in various legal proceedings, claims, investigations and other legal matters which arise in
the ordinary course of business. We have booked a provision for one of these proceedings in particular
which includes us as the subject of a payment claim made by the insolvency administrator of Qimonda
Dresden GmbH & Co. KG in April 2013. The claim was made in connection with an insolvency action
(Insolvenzanfechtung) regarding a payment made by Qimonda Dresden GmbH & Co. KG to us in the
amount of approximately $ 2.6 million plus accrued interest as of April 1, 2009. This matter has not yet
been resolved. Although it is not possible to predict the outcome of this or other matters, we believe that
the ultimate outcome of our pending legal proceedings, individually and in the aggregate, will not have a
material adverse effect on our business, financial condition or results of operations. Also see ‘‘Part 1: Risk
Factors—Risks Relating to Our Business—We are subject to environmental laws and regulations, which could
require us to incur environmental liabilities, increase our manufacturing and related compliance costs or
otherwise materially adversely affect our business, net assets, financial condition and results of operations’’ and
‘‘—M. Proprietary Information and Intellectual Property.’’
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S.
INSURANCE
Our insurance coverage includes, inter alia, business interruption insurance, business liability insurance,
IPO insurance and directors and officers (‘‘D&O’’) insurance.
We have taken out an IPO insurance policy to cover claims arising from the Offering and we have D&O
insurance for the members of our Management Board and Supervisory Board and certain other senior
officers of our Group companies. We believe the coverage under these policies to be adequate. The D&O
insurance covers financial losses that may arise in the course of the exercise of the corporate duties of the
insured persons. As required under applicable German law, each member of our Management Board
remains personally responsible, in the event they are adjudged to have personal liability, for ten percent of
the total amount of such liability, up to an amount that equals five times such member’s total annual fixed
remuneration from our Group.
We believe, according to our current knowledge and based on certain analyses performed by our risk
management team, that our insurance coverage, including the maximum coverage amounts and terms and
conditions of the policies, are standard for our industry and appropriate. We cannot, however, guarantee
that we will not incur any losses or be the subject of claims that exceed the scope of the relevant insurance
coverage.
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PART 13: MANAGEMENT
A.
OVERVIEW
Our governing bodies are the Management Board (Vorstand), the Supervisory Board (Aufsichtsrat) and the
General Shareholders Meeting (Hauptversammlung). We have a two-tier management and control system,
consisting of the Management Board and the Supervisory Board. The powers of these governing bodies are
determined by the German Stock Corporation Act (Aktiengesetz), our articles of association and our
internal rules of procedure of both the Supervisory Board and the Management Board.
The Management Board conducts our business in accordance with the law, the articles of association and
the internal rules of procedure of the Management Board, taking into account the resolutions of the
General Shareholders Meeting. It represents us in dealings with third parties. The Management Board is
required to introduce and maintain appropriate risk management and risk controlling measures, in
particular setting up a monitoring system in order to ensure that any developments that may put at risk the
continuation of our business may be identified early. Furthermore, the Management Board must report
regularly to the Supervisory Board on our performance and operations. In addition, the Management
Board is required to present to the Supervisory Board, no later than at the last Supervisory Board meeting
of each fiscal year, of the key aspects of our business plan (including financial investment and personnel
planning) for the following fiscal year for approval by the Supervisory Board. The Management Board
must report on all matters of significant importance, verbally or in writing, to the chairman of the
Supervisory Board. Significant matters include any development or event at an affiliated company that has
come to the attention of the Management Board and that could have a material influence on our position.
The Supervisory Board appoints the members of the Management Board and is authorized to dismiss
members for good cause. Simultaneous membership on the Management Board and the Supervisory
Board of our company is prohibited. The Supervisory Board advises and monitors the Management Board
in performing its management functions. The Management Board may not transfer management tasks to
the Supervisory Board. However, pursuant to our articles of association and the rules of procedure of the
Management Board, the Management Board must obtain the consent of the Supervisory Board for certain
types of transactions or measures, in particular transactions or measures that give rise to fundamental
changes to our net assets, financial position or results of operation.
The members of the Management Board and of the Supervisory Board owe us duties of loyalty and due
care. In discharging these duties, the members of the Management Board and the Supervisory Board have
to take into account the interests of all stakeholders, in particular those of our company, our shareholders,
employees and creditors. If the members of the Management Board or Supervisory Board violate their
duties of loyalty and due care, they are jointly and severally liable to us for damages. We have taken out
D&O insurance for the benefit of each member of the Management Board and Supervisory Board. The
D&O insurance policy, which provides for a deductible for our Management Board members, covers in
accordance with its terms, the beneficiaries’ costs of legal defense and financial loss.
Under the German Stock Corporation Act (Aktiengesetz), neither any shareholder nor any other person
may use its influence on us to cause a member of the Management Board or Supervisory Board to act in a
manner that would be detrimental to us. Any person or entity intentionally using its influence to cause a
member of the Management Board or Supervisory Board, a holder of a general commercial power of
attorney or an authorized agent to act in a manner harmful to us or our shareholders, is liable to us for any
resulting losses. Moreover, in such case, the members of the Management Board and Supervisory Board
may also be jointly and severally liable if they have acted in breach of their duty of loyalty and care towards
us.
Generally, an individual shareholder may not pursue claims against members of the Management Board or
Supervisory Board believed to have acted in breach of their duties to us and, as a result, have caused us to
suffer losses. Our claims for damages against the members of the Management Board or Supervisory
Board may generally only be pursued by us; in the case of claims against members of the Supervisory
Board, we are represented by the Management Board, and in the case of claims against members of the
Management Board, we are represented by the Supervisory Board. The German Highest Court in Civil
Matters (Bundesgerichtshof) has repeatedly held that the Supervisory Board is generally obligated to
pursue damage claims against Management Board members, provided the claims are likely to succeed and
there are no overriding interests of the company arguing against pursuing the claims. Even if the
Management Board or Supervisory Board, as the case may be, decides against pursuing damage claims
against members of the Supervisory Board or the Management Board, as the case may be, such claims have
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to be pursued should the General Shareholders Meeting adopt a resolution to such effect with simple
majority of the votes cast.
Shareholders who hold, individually or together with other shareholders, at least ten percent of the stated
share capital or shares representing at least A 1.0 million of stated share capital may apply to the competent
court to appoint a representative to pursue their claims for damages. Furthermore, shareholders who hold,
individually or together with other shareholders, 1 percent of the stated share capital or shares
representing at least A 100,000 of stated share capital may apply to the competent court that they be
granted standing to pursue damage claims of the company in their own name, provided that the share
ownership thresholds are met at the time of application to the court. The application must be filed with the
regional court (Landgericht) where we have our registered office. The shareholders will be granted
standing to sue in their own name if, among other things, we have failed to comply with a request of our
shareholders to bring a lawsuit for damages within an appropriate deadline, facts indicate that we incurred
a loss resulting from fraudulent action or a gross violation of the law or our articles of association and
there are no overriding interests of our company arguing against certain minority shareholders together
pursuing damage claims of our company. We are entitled to bring a claim for damages at any time,
assuming a pending lawsuit of our shareholders or running a lawsuit in parallel to our shareholders.
We may only waive or settle a claim for damages against members of the Management Board or
Supervisory Board if at least three years have passed since the claim has come into existence and if the
General Shareholders Meeting approves the waiver or settlement by a simple majority and no minority of
shareholders whose aggregate shareholdings amount to at least one-tenth of the stated share capital
records an objection to such resolution in the minutes of the General Shareholders Meeting.
B.
MANAGEMENT BOARD
Overview
Pursuant to Section 5 of our articles of association, our Management Board must have at least two
members. The actual number of Management Board members is determined by the Supervisory Board.
Currently, our Management Board has two members. The Supervisory Board appoints one Management
Board member as chairman. The Supervisory Board may appoint deputy members of the Management
Board.
The Supervisory Board appoints Management Board members for a maximum term of five years.
Reappointment or extension of the term of office (for a maximum of five years in each case) is permissible.
In making appointments, the Supervisory Board takes into account the age limit (67 years) for
Management Board members, as determined by the Supervisory Board. The Supervisory Board may
revoke the appointment of a Management Board member prior to expiry of his term of office for cause,
such as gross violation of his duties as a member of the Management Board or a vote of no-confidence by
the General Shareholders Meeting. According to our articles of association, the Supervisory Board issues
rules of procedure for the Management Board, which stipulate, in particular, those transactions for which
the Supervisory Board’s consent is required. The resolutions of the Management Board are adopted by a
simple majority of its members, unless a different majority is required as a matter of law or pursuant to our
articles of association. In the event of a tie, the vote of the chairman of the Management Board is decisive.
In case the Management Board consists of two members, resolutions of the Management Board require
unanimous approval. Two Management Board members acting together or one Management Board
member acting together with a general commercial attorney-in-fact (Prokurist) are authorized to represent
our company vis-à-vis third parties.
The table below lists the members of the Management Board as of the date of this prospectus and includes
their age, principal areas of responsibility, the year in which each member was first appointed, the year in
which their term expires, and all companies in which the members held seats on an administrative,
management or supervisory body as of December 31, 2014. This table also indicates the principal activities
performed by the members of the Management Board where these are significant with respect to us, by
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listing, in particular, their membership on an administrative, management or supervisory body at all of our
subsidiaries.
Name
Age
Area of responsibility/activity
Dr. Christoph von Plotho . . 59 President & Chief Executive
Officer of Siltronic AG
Current and past memberships
on other supervisory or
Year first Year term administrative boards or boards
appointed expires
of directors
2010
2018
Member of Board of
Directors of Siltronic Silicon
Wafer Pte. Ltd., Singapore
(SSW)
Member of the board of
directors of Wacker
Chemicals Middle East FZE
(past)
Member of Board of
Directors of Siltronic
Singapore Pte. Ltd.,
Singapore (SSP)
directors of Wacker
Asahikasei Silicone Co. Ltd.
(past)
Member of Board of
Directors of Siltronic Asia
Pte. Ltd., Singapore (SAP)
directors of Wacker
Chemical Norway AS (past)
Member of Board of
Directors (Chairman) of
Siltronic Corporation,
Portland (SCO)
Supervisor of Wacker
Chemicals
(Zhangjiagang) Co. Ltd.
(past)
Member of Board of
Siltronic Japan Corporation,
Tokyo (SJC)
Rainer Irle . . . . . . . . . . . . 45 Executive Vice President &
Chief Financial Officer of
Siltronic AG
directors of Wacker
Chemical Corporation (past)
2013
2020
Member of Board of
Siltronic Japan Corporation,
Tokyo (SJC)
Member of Board of
Directors of Siltronic
Corporation, Portland (SCO)
The following description provides summaries of the curricula vitae of the current members of the
Management Board and indicates their principal activities outside Siltronic AG to the extent those
activities are significant with respect to Siltronic AG.
Dr. Christoph von Plotho has been President and Chief Executive Officer on Siltronic AG’s Management
Board since October 2010. He started his career as Lab Head at Wacker Chemie AG in 1984.
Dr. Christoph von Plotho has since held various executive positions at Wacker Chemie AG and its
subsidiaries. He was born on October 16, 1955 in Beuel/Bonn in Germany. Dr. Christoph von Plotho
studied chemistry at Rheinisch-Westfälische Technische-Hochschule Aachen. In 1984 he obtained a
doctorate in chemistry.
Rainer Irle has been Executive Vice President and Chief Financial Officer on Siltronic AG’s Management
Board since January 2013. He started his career as a management consultant at A.T. Kearney GmbH in
1997. Since 2003 he has held various positions at Wacker Chemie AG and its subsidiaries, including CFO
of Siltronic Corporation, USA. Rainer Irle was born on March 17, 1970 in Bergneustadt/Germany. He
graduated in Industrial Engineering and Management from the University of Siegen/Germany in 1997 and
obtained his Master of Science in Engineering at the Chalmers University of Technology, Göteborg/
Sweden in the same year.
The members of the Management Board may be contacted at our business address.
In the year ended December 31, 2014, the Management Board held 10 meetings, including regularly
scheduled and special meetings.
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Management Board Member Service Agreements
The maximum term of the Management Board member’s service agreements is five years.
In connection with the Offering, a new service agreement has been concluded with each Management
Board member which will replace their current service agreement effective on the first trading day of the
Company’s shares. The new service agreements provide for a fixed term, with Dr. von Plotho’s agreement
expiring in 2018 and Mr. Irle’s agreement expiring in 2020, corresponding with the respective Management
Board member’s current appointment to the Management Board. In the event the Management Board
member’s term of office is extended, the service agreements will extend accordingly. During a
Management Board member’s appointment, each service agreement may only be terminated for good
cause within the meaning of Section 626 German Civil Code (Bürgerliches Gesetzbuch). In the event of a
revocation of the appointment as a member of the Management Board or in any other case of early
termination of such appointment, the service agreements, unless terminated for good cause, shall end at
the earlier of (i) the expiration of a notice period equal to the statutory notice period under Section 622
German Civil Code (Bürgerliches Gesetzbuch), but in no case less than three months to the end of a month,
or (ii) the end of the agreed regular term of the service agreement. In case the service agreement is
terminated early, any payments which are agreed with the member of the Management Board, including
fringe benefits, must not exceed the value of twice such member’s annual remuneration, nor the amount of
the remuneration that would be payable until the regular end of the term of the service agreement
(‘‘severance pay cap’’). The calculation of the severance pay cap shall be based on the average annual
remuneration granted to the member of the Management Board in the preceding financial year and the
expected total remuneration for the respective ongoing financial year. If the service agreement is
terminated by the Company for good cause or if the service agreement is terminated by mutual agreement
because the member of the Management Board assumes another position within the Wacker Group, no
severance shall be paid.
During the term of the service agreements and for twelve months thereafter, any professional occupation
in addition to the services owed to the Company of a member of the Management Board requires the prior
written approval of the chairman of the Supervisory Board. Each service agreement contains a
non-compete clause which is valid during the term of each service agreement pursuant to which the
member of the Management Board is prohibited from working for a company that is a direct or indirect
competitor of the Company or its affiliated companies and from founding, acquiring and participating in
such company without the prior written approval of the Supervisory Board and continues for a period of
twelve months after termination of the agreement. However, each member of the Management Board is
allowed to buy shares in publicly traded companies for the purpose of a private investment, provided that
such share ownership does not reach five percent of the share capital of any given company. In exchange
for the post-contractual non-compete obligation, each member of the Management Board is entitled to
receive a compensation payment that equals 50 percent of the last total annual remuneration of the
respective member of the Management Board, calculated as the average annual remuneration over the
three years prior to the termination of the service agreement. The compensation payment is payable in
twelve equal monthly installments. The Company may waive the post-contractual non-compete covenant,
immediately releasing the Management Board member from the non-compete obligation, but will still be
required to make the compensation payment for six months following the declaration of such waiver.
Remuneration and Other Benefits of the Members of the Management Board
In the 2014 fiscal year, the total remuneration to all of our Management Board members was A 1.1 million.
Pension reserves in the amount of approximately A 2.5 million have been created for the currently active
Management Board members.
Under each of the new service agreements, the remuneration of a member of the Management Board
consists of (i) an annual fixed salary and (ii) a variable long-term incentive in accordance with the
Company’s Long-Term Bonus Plan (‘‘LTB Plan’’). The annual performance-based variable long-term
incentive (‘‘LTB Bonus’’) depends on the achievement of certain business targets within an assessment
period covering three calendar years (‘‘Assessment Period’’). The applicable business targets relate to
(i) return on capital employed (ii) plan-business value contribution, (iii) EBITDA margin and
(iv) operating net cash flow, as defined in the Company’s index of performance indicators
(Kennzahlensystem) and are determined by the Supervisory Board for every calendar year in advance. The
Supervisory Board may also set other or further appropriate targets. If all business targets are fully
achieved, the LTB Bonus is equal to the average fixed annual salary the Managing Board member received
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in the last year of the Assessment Period. At the end of the Assessment Period, the LTB Bonus is
determined as follows: For each year of the Assessment Period, an annual overall target achievement
factor is calculated as the sum of the target achievement rates achieved in the relevant business target
categories (within a certain minimum and maximum level range) set for the respective fiscal year and their
weighting in relation to one another as predetermined by the Supervisory Board. The annual overall target
achievement factor multiplied by 100 equals a percentage value (‘‘LTB Bonus Percentage Value’’) that is
capped at a maximum of 200 percent. The LTB Bonus amount equals the average of the LTB Bonus
Percentage Value for each year of the Assessment Period multiplied by the Managing Board member’s
average fixed annual salary received in the last year of the relevant Assessment Period. The Supervisory
Board may, in its reasonable discretion and in consideration of all relevant circumstances, reduce or
increase the LTB Bonus amount by up to 30 percent. The LTB Bonus amount can therefore range from
zero percent to 200 percent, at a maximum 260 percent, of the Management Board member’s average fixed
annual salary received in the last year of the Assessment Period. The amount of the LTB Bonus is
determined by the Supervisory Board in March following each relevant Assessment Period. 85 percent of
the LTB Bonus is paid in cash and 15 percent of the LTB Bonus is granted in the form of shares in the
Company (the number of shares being determined based on the closing price of the Company’s shares on
the Frankfurt Stock Exchange on the day which follows the next ordinary shareholders’ meeting after the
LTB Bonus amount was determined). The shares so acquired are subject to a holding period of two years
following the first ordinary shareholder‘s meeting after the determination of the LTB Bonus. The LTB
Bonus is also payable if the service agreement expires without extension or is terminated by the
Management Board member, but then only in cash and on a pro rata temporis basis.
If the situation of the Company deteriorates after the relevant determination of the remuneration so that a
continued payment of the remuneration would be unreasonable (unbillig) for the Company, the
Supervisory Board is entitled to reduce the Management Board member’s remuneration to a reasonable
level. In addition to their fixed salary and variable compensation, Management Board members may also
receive fringe benefits including business expense reimbursement, health insurance, directors and officers
insurance, and a company car.
If the Company’s shares are admitted to trading on a German stock exchange in 2015 for the first time
(‘‘Listing Event’’) and the required free float is achieved by placing shares in the Company at a price that
falls within or exceeds the Price Range, the members of the Management Board are entitled to a one-time
payment (an ‘‘IPO Bonus’’) in the aggregate amount of A 204,000. The IPO Bonus is paid through a
combination of cash and shares in the Company. Each Management Board member will receive Offer
Shares representing 50 percent of their IPO Bonus as part of the Offering. The cash component represents
the other 50 percent of their IPO Bonus and is payable in the month following the Listing Event.
Total aggregate compensation paid to the members of the Management Board under their old service
agreements (up until the Listing Event and including the IPO Bonus) and the new service agreements
(following the Listing Event) is expected to be approximately A 1.4 million in 2015. The members of the
Management Board also receive pension benefits for which the Company already has an existing pension
commitment via the pension fund (Pensionskasse) of Wacker Chemie VVaG. In addition to this
commitment, the members of the Management Board are entitled to a company pension in accordance
with the Company’s supplementary company pension plan (Ordnung der betrieblichen Zusatzversorgung)
and to a monthly allowance for contributions to a private pension insurance in an amount equaling the
employer‘s contribution to the statutory pension insurance. The Company’s annual aggregate pension
expenses (service costs) of the Management Board are expected to amount to approximately A 0.2 million
in 2015.
Shareholdings of the Members of the Management Board in Siltronic AG
As of the date of this prospectus, the members of the Management Board do not hold any shares or
options on shares in Siltronic AG. As part of the Offering, members of the Management Board will
receive, in the aggregate, A 102,000 in Offer Shares (3,000 Offer Shares in the aggregate at the mid-point of
the Price Range) representing an aggregate 0.01 percent of the outstanding shares of the Company upon
completion of the Offering. Offer Shares received by members of the Management Board will be subject to
a two-year holding period pursuant to an agreement with the Company.
We have not granted any loans to Management Board members or assumed any guarantees for them.
During the current or previous fiscal year, the Management Board members were not involved in any
Group transactions outside the subject matter of our business as defined in our articles of association or
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otherwise in any Group transactions of an unusual type or nature, nor were they involved in any such
transactions, which have not yet been fully completed in prior years.
C.
SENIOR MANAGEMENT
Members
Name
Age
Area of responsibility/activity
Current and past memberships on
supervisory or administrative boards or
boards of directors
Dr. Volker Braetsch . . . . . . . 58 Senior Vice President, Sales & Member of the SEMI European
Marketing Siltronic AG
Advisory Board (current)
Dr. Andreas Mühe . . . . . . . . 44 Senior Vice President,
Operations Siltronic AG
Member of the board of trustees
for the Fraunhofer Institut für
Integrierte Systeme und
Bauelementerechnologie IISB
(current)
Bernhard Schmidt . . . . . . . . . 51 Senior Vice President,
Engineering Siltronic AG
—
Dr. Rüdiger Schmolke . . . . . 50 Senior Vice President,
Technology Siltronic AG
—
The following description provides summaries of the curricula vitae of our senior management and
indicates their principal activities outside Siltronic AG to the extent those activities are significant with
respect to Siltronic AG.
Dr. Volker Braetsch has been Senior Vice President, Sales & Marketing of Siltronic AG since 2010. Since 1987
he has been with the Wacker group and held various positions at Wacker Chemie AG and its subsidiaries in
R&D, technology and strategic planning including an extended time in Singapore as vice president of
commercial operations. Dr. Braetsch was born in 1956. He obtained his master in material science at
Technical University Clausthal in 1983 and completed his PhD at Technical University Clausthal in 1986.
Dr. Andreas Mühe is Senior Vice President, Operations of Siltronic AG since 2011. He was managing director
of Crystal Growing Systems GmbH before joining Siltronic AG as head of Crystal Center in 2006. He
graduated in physics from the University of Stuttgart in 1997 and completed his PhD in materials sciences
at University of Erlangen in 2001. Dr. Mühe was born in 1970.
Bernhard Schmidt has been Senior Vice President, Engineering of Siltronic AG since 2004. He has been with
the Wacker group since 1988 and has worked in different business divisions within the Wacker group and
as a project engineer in Singapore and Freiberg before taking over as senior vice president of engineering.
Mr. Schmidt was born in 1963. He obtained his Dipl. Ing. (Univ.) chemical engineering in 1988.
Dr. Rüdiger Schmolke has been Senior Vice President, Technology of Siltronic AG since 2011. He joined the
company as a member of the R&D department in 1995 and has been with the Wacker group ever since.
Dr. Schmolke was born in 1964, graduated in physics from RWTH Aachen and completed his PhD in
physics at TU Berlin.
Remuneration and Other Benefits of the Members of the Senior Management
During the 2014 fiscal year, the total aggregate remuneration received by senior management, excluding
members of the Management Board, was A 0.9 million.
Shareholdings of the Members of the Senior Management in Siltronic AG
As of the date of this prospectus, the members of our senior management do not hold any shares or
options on shares in Siltronic AG.
D.
SUPERVISORY BOARD
Overview
Pursuant to our articles of association, our Supervisory Board has twelve members. Pursuant to the
German Co-determination Act (Mitbestimmungsgesetz), at least one-half of the members of the supervisory
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board of a company like ours with at least 2,000 employees in Germany, must be employee representatives.
In line therewith, six members of our Supervisory Board are appointed by the shareholders (i.e. are elected
by the shareholders at the General Shareholders Meeting in accordance with the applicable provisions of
the German Stock Corporation Act) and six members are appointed by our employees (i.e. elected in
accordance with the provisions of the 1976 Co-determination Act (Mitbestimmungsgesetz)).
Pursuant to our articles of association, in conjunction with Section 102 of the German Stock Corporation
Act (Aktiengesetz), members of our Supervisory Board—and where applicable, substitute members—are
elected for a maximum term which ends upon the conclusion of the General Shareholders Meeting which
passes a resolution to discharge the actions of the Supervisory Board for the fourth fiscal year following
commencement of such member’s term of office. The fiscal year in which the term of office commences
does not count towards the calculation of a Supervisory Board member’s term of office. However, the
General Shareholders Meeting may elect the member of the Supervisory Board for a shorter term than the
maximum. If a Supervisory Board member leaves office prior to the expiration of his term of office, a
successor is elected by the General Shareholders Meeting, usually for the remainder of the departing
Supervisory Board member’s term of office. When a Supervisory Board member is elected, a substitute
member may be appointed at the same time. The substitute member will succeed the elected member for
whom he has been appointed as substitute on the Supervisory Board if the elected member leaves office
early, as long as no successor is elected.
Each Supervisory Board member and each substitute member may resign from office without cause by
giving four-weeks’ notice in writing to the chairman of the Supervisory Board or to the Management
Board.
Pursuant to Section 27 (1) - (2) of the Co-determination Act (Mitbestimmungsgesetz), the Supervisory
Board elects its chairman and deputy chairman from among its members. Currently, Dr. Joachim Rauhut
is chairman of our Supervisory Board and Walter Ortner is deputy chairman. Unless explicitly elected for a
shorter period, the term of office of the chairman and the deputy chairman will be consistent with their
term of office as Supervisory Board members. The election is held following the General Shareholders
Meeting at which the shareholder representatives on the Supervisory Board are elected by the General
Shareholders Meeting. Should the chairman or the deputy chairman, as the case may be, leave his office
prior to the expiration of his term, the Supervisory Board must elect a new chairman or deputy chairman,
as the case may be, without undue delay.
The Supervisory Board chairman is responsible for calling and chairing Supervisory Board meetings. The
German Stock Corporation Act provides that a quorum of the Supervisory Board exists if at least three
members, and at least one-half of the members of the Supervisory Board as required by applicable law or
the articles of association, participate in the vote. The resolutions of the Supervisory Board are passed with
simple majority of the votes cast, unless provided otherwise by mandatory provisions of law. If in the case
of a tie vote on a certain subject, the repeat vote on the same subject results in a tie vote, again, the
chairman, not, however, the deputy chairman, has two votes and can, thus, decide the vote.
Pursuant to the articles of association, the Supervisory Board adopts rules of procedure governing its
internal dealings within the legal framework of applicable law and the articles of association.
In addition, under German law, each member of the Supervisory Board is obliged to carry out his or her
duties and responsibilities in person, and such duties and responsibilities cannot be generally and
permanently delegated to third parties. However, the Supervisory Board and its committees, including the
Audit Committee, have the right to retain third-party experts or advisers on a case-by-case basis if the
members of the Supervisory Board do not have the necessary expertise to perform their duties in
connection with specific matters. For example, the Supervisory Board is authorized to retain an audit firm
and/or legal counsel if it wants to investigate potentially illegal activities occurring in a foreign subsidiary.
We will bear the costs for third-party experts or advisors retained by the Supervisory Board or any of its
committees, including the Audit Committee.
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Members
The table below lists the members of our Supervisory Board as of the date of this prospectus and includes
their professional position, age, function on the Supervisory Board, the year in which each member was
first appointed, the year in which their term expires and all companies in which the members held seats on
an administrative, management or supervisory body as of December 31, 2014, including on corporate
bodies of one of our subsidiaries.
Name
Age
Dr. Joachim Rauhut . . . . . . . . . . .
Member of the Management
Board & Chief Financial Officer
Wacker Chemie AG
60
Chairman (Vorsitzender)
2001
2018
Member of the Pensionskasse der
Wacker Chemie VVaG supervisory
board (current)
Member of the MTU Aero Engines
AG supervisory board (current)
Member of the J. Heinrich Kramer
Holding GmbH advisory council
(current)
Member of the B. Braun Melsungen
AG supervisory board (current)
Member of the COMMERZBANK
Aktiengesellschaft Regional
advisory council south (current)
Member of management board of
Wacker Chemie Dritte Venture
AG (current)
Wacker Chemie Achte Venture
AG (current)
Chairman of board of directors of
Wacker Chemical Corporation
(current)
Walter Ortner* . . . . . . . . . . . . . .
Chairman of the General Works
Council
(Gesamtbetriebsratsvorsitzender)
Siltronic AG
65
Deputy Chairman (stv.
Vorsitzender)
1998
2018
—
Sieglinde Feist . . . . . . . . . . . . . .
Senior Vice President Corporate
Development Wacker Chemie AG
52
2014
2018
Wacker Chemie Dritte Venture
AG (current)
Wacker Chemie Achte Venture
AG (current)
Non-executive director of Wacker
Chemicals Norway AS (current)
Statutory Auditor of Wacker
Chemicals Korea Inc. (past)
Dr. Hermann Gerlinger . . . . . . . . .
Member of the Management Board
Carl Zeiss AG
61
2011
2018
Member of the supervisory board of
various subsidiaries of Carl Zeiss
Jena AG (current)
Bernd Jonas . . . . . . . . . . . . . . .
Consultant and former Head of
64
2015
2018
Member of the board of directors of
ThyssenKrupp Canada Inc.
(current)
ThyssenKrupp Elevator AG
(current)
ThyssenKrupp Industrial Solutions
AG (current)
ThyssenKrupp Slab
International B.V. (past)
ThyssenKrupp Marine
Systems GmbH (past)
ThyssenKrupp Companhia
Siderúrgı́ca do Atlantico Ltda.
(past)
Corporate Center Taxes & Customs
at ThyssenKrupp AG
111
Year first Year term
appointed expires
Current and past directorships and
memberships on other supervisory
or administrative boards
Function on
Supervisory Board
Name
Age
Function on
Supervisory Board
appointed expires
ThyssenKrupp Reinsurance AG
(past)
ThyssenKrupp Aufzüge GmbH
(past)
ThyssenKrupp Italia S.p.A. (past)
Director of Thyssen Stahl GmbH
(past)
Hoesch AG (past)
Member of the board of directors of
ThyssenKrupp USA, Inc. (past)
Dr. Tobias Ohler . . . . . . . . . . . . .
Member of the Management Board
Wacker Chemie AG
44
2013
2018
Member of the management board
of Wacker Chemie AG (current)
Chairman of the executive board of
Berufsbildungswek Burghausen
(current)
Supervisor at Wacker Chemicals
Trading (Shanghai) Co Ltd.
(current)
Supervisor at Wacker Chemicals
(China) Co Ltd. (current)
Dr. Franz Richter . . . . . . . . . . . .
President & CEO
Thin Materials AG
59
2008
2018
Member of board of directors of
SEMI International (current)
Thin Materials GmbH (current)
Scint-X AB (current)
Member of advisory board of
Amicra Microtechnologies GmbH
(current)
Member of advisory board of Mück
Management Partner AG (current)
Chairman of advisory board of
Fraunhofer Institut für
Zuverlässigkeit und
Mikrointegration IZM (current)
Chairman of supervisory board of
Süss MicroTec AG (current)
Replisaurus Technologies, Inc.
(past)
Member of board of directors of
EpiSpeed AG (past)
Maximilian Baumgartner* . . . . . . .
Vice President Crystal Center
Siltronic AG
57
2008
2018
—
Karin Gottschalk* . . . . . . . . . . . .
Vice Chairman of the General
Works Council Siltronic AG
58
2004
2018
Member of the advisory council of
the Industrial Union for Mining,
Chemicals, and Energy (past)
Member of the management board
of the Industrial Union for
Mining, Chemicals, and Energy
(current)
Johann Hautz* . . . . . . . . . . . . . .
Vice Chairman of the General
Works Council
Siltronic AG Burghausen
52
2003
2018
—
Gertraud Lauber* . . . . . . . . . . . .
IG BCE, Divisional Head REACH /
Water Management
55
2013
2018
Non-voting board member of the
European Chemicals Agency
(ECHA) (current)
Sanofi Aventis
Deutschland GmbH (past)
112
Name
Age
Function on
Supervisory Board
appointed expires
Clariant Produkte
Deutschland GmbH (past)
Clariant Verwaltungsgesellschaft
(past)
Harald Sikorski* . . . . . . . . . . . . .
Chairman of the district executive
committee (Vorsitzender des
Bezirksvorstands)
Altötting IG BCE
*
48
2011
2018
Wacker Chemie AG (current)
Südsalz GmbH (past)
Gerresheimer AG (past)
Employee representative.
The following description provides summaries of the curricula vitae of the current members of the
Supervisory Board and indicates their principal activities outside Siltronic AG to the extent those activities
are significant with respect to Siltronic AG.
Dr. Joachim Rauhut was born in May 1954 in Linz/Rhine in Germany. He was first appointed as a member of
our Supervisory Board in 2001 and has served as chairman of our Supervisory Board since February 2013.
He absolved a master’s degree in industrial engineering and business administration from the Technical
University of Karlsruhe in 1979, and received his doctorate in engineering at the Technical University of
Berlin in 1982. He started his career in the corporate planning department at Mannesmann Demag AG in
1982, and thereafter, held various executive positions at Mannesmann and its subsidiaries. He has been
chief financial officer on the management board of Wacker Chemie AG (and previously WackerChemie GmbH) since 2001.
Walter Ortner was born in November 1949. He has been a member of our Supervisory Board since 1986 and
vice chairman of our Supervisory Board since 2000. Walter Ortner joined Siltronic in 1977 as technical
expert in the R&D department. In 1984, he was elected full-time member of the general works council. He
currently serves as the chairman of the general works council.
Bernd Jonas was born in Bonn in 1951. He is the newest member of our Supervisory Board and has served as
an independent member and chairman of the audit committee since May 7, 2015. Mr. Jonas completed his
studies of law in 1974. He began his career working at the tax authority in Nordrhein-Westfalen before
becoming a tax consultant with the German Association of Chambers of Industry and Commerce
(Deutscher Industrie-und Handelstag). In 1986, he joined the Fried. Krupp group as head of group
accounting and taxes. Since then he held a variety of management positions at the Krupp group prior to its
merger with Hoesch AG and Thyssen AG and served as the director of tax of ThyssenKrupp AG from 1999
until 2013. Mr. Jonas now works as an in-house consultant for ThyssenKrupp AG and is a member of the
German Auditor Oversight Commission, Berlin.
Sieglinde Feist was born in May 1963 in Munich. She was first appointed as a director in 2014. Graduating
with an economics degree, Ms. Feist started her career at Siemens AG and held several leadership
positions in finance and controlling within different companies in the semiconductor industry. She has also
held several board seats in German and international subsidiaries. Ms. Feist joined Wacker Chemie AG in
2009 and has served as Wacker Chemie AG’s senior vice president of corporate development since
November 2014. Before that, she was responsible for controlling and the core products business team
within Wacker Silicones, a division of Wacker Chemie AG.
Dr. Hermann Gerlinger was born in Bad Mergentheim, Germany in 1953. He has been a member of our
Supervisory Board since March 2011. Dr. Gerlinger obtained a degree in physics from the University of
Würzburg in 1979 and received his doctorate degree in the field of physics and astronomy of the University
of Würzburg in 1983. Dr. Gerlinger started his career at ZEISS in 1984 and he has held various
management positions in R&D and operations before he became executive vice president and general
manager of its semiconductor manufacturing technology business group in 1999. In 2001, he was appointed
president and chief executive officer of Carl Zeiss SMT AG (Carl Zeiss SMT GmbH after change in legal
form). Dr. Gerlinger has been a member of the executive board of Carl Zeiss AG since 2006.
Dr. Tobias Ohler was born in January 1971 in Saarbrücken, Germany. He has been a member of our
Supervisory Board since 2013. Dr. Ohler is a member of the management board of Wacker Chemie AG
113
since January 2013. Dr. Tobias Ohler started his career as a consultant and associate principal at
McKinsey & Co. in 1997. Dr. Tobias Ohler joined Wacker Chemie AG as head of corporate controlling in
2005 and became head of raw materials procurement in 2008. He served as chief financial officer on the
Management Board of Siltronic AG from 2010 until January 2013. He graduated in economics in
Aix-Marseille/France and obtained a master’s degree in business administration and industrial engineering
at the Universities in Karlsruhe/Germany and Sydney/Australia. In 2000 he obtained his doctorate in
economics in Oldenburg/Germany.
Dr. Franz Richter was born in July 1955. He has been a member of our Supervisory Board since 2008. He has a
degree in physics and a doctorate degree in engineering and works as a managing director of Thin
Materials GmbH, a subsidiary of Nissan Chemical Industries, Ltd. He serves on the advisory boards of
Amicra Microtechnologies GmbH in Regensburg, Germany and Mück Management Partners in
Switzerland. He also serves as chairman of Scint-x AB in Sweden and chairs the board of trustees for
Fraunhofer IZM Berlin.
Maximilian Baumgartner was born in July 1957. He has been a member of our Supervisory Board since 2008.
He has a master’s degree in physics and joined Siltronic in 1986, working in research and development. He
has since then held various management positions and is, since 2013, serving as Vice President Crystal
Center Germany.
Karin Gottschalk was born in September 1956. She has been a member of our Supervisory Board since May 1,
2004. Ms. Gottschalk joined VEB Spurenmetalle as a trainee in 1973. With the acquisition of VEB
Spurenmetalle’s silicon business in 1996 by Siltronic AG, she became an employee of Siltronic AG. She
was an operations manager prior to her election as full-time member of the general works council in 2002.
She has been member of our Supervisory Board since 2003. Karin Gottschalk is a member of the advisory
council of the Industrial Union for Mining, Chemicals, and Energy (Industriegewerkschaft Bergbau, Chemie,
Energie) and member of its Northeast German board.
Johann Hautz was born in May 1962. He has been a member of our Supervisory Board since 2003. Mr. Hautz
has been employed with Siltronic since 1984, first as a crystal grower and then as a shift manager for heat
treatment before serving as a member of the general works council beginning in 1994. He also holds
positions with the Industrial Union for Mining, Chemicals, and Energy (Industriegewerkschaft Bergbau,
Chemie, Energie) on the advisory board and on its district board for Altötting, Germany.
Gertraud Lauber was born in July 1959. She has been a member of our Supervisory Board since February 26,
2013. She is employed with the Industrial Union for Mining, Chemicals, and Energy (Industriegewerkschaft
Bergbau, Chemie, Energie) as an expert for Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH), a European Union regulation. Ms. Lauber is a non-voting board member of the
European Chemicals Agency (ECHA).
Harald Sikorski was born in May 1966. He has been a member of our Supervisory Board since 2011. He
began his career as an electrician, but now works with the Industrial Union for Mining, Chemicals, and
Energy (Industriegewerkschaft Bergbau, Chemie, Energie) and also serves as a member of the supervisory
board for Wacker Chemie AG. He also serves as an administrative committee member for a local office for
Germany’s federal employment agency in Traunstein, Germany and volunteers as a judge for labor
disputes in Rosenheim, Germany.
In the year ended December 31, 2014, the Supervisory Board held four meetings, including regularly
scheduled and special meetings.
The members of the Supervisory Board may be contacted at our business address.
Supervisory Board Committees
Pursuant to our articles of association, the Supervisory Board can set up committees in accordance with
applicable law. According to Section 12 of our articles of association and Section 8 of the Supervisory
Board’s rules of procedure, the Supervisory Board is to form an executive committee (Präsidialauschuss), a
mediation committee (Vermittlungsausschuss), an audit committee (Prüfungsausschuss) and a nomination
committee (Nominierungsausschuss) from among its members. Other committees may be formed if
necessary, including a compensation committee (Vergütungsausschuss) which has not been constituted at
114
present. The Supervisory Board’s decision-making authority may be delegated to these committees to the
extent permitted by law. The following committees have been established by the Supervisory Board:
Executive Committee
Our executive committee (‘‘Executive Committee’’) is to debate key issues and make proposals to the
Supervisory Board with respect to the appointment and dismissal of members of the Management Board
and with respect to their respective compensation and reductions in compensation. The Executive
Committee consists of three members, including one employee representative. The Executive Committee
is composed of the Supervisory Board’s chairman, the Supervisory Board’s deputy chairman and one
additional member to be elected by the Supervisory Board.
Currently, Dr. Rauhut, Mr. Ortner and Dr. Gerlinger are the members of our Executive Committee.
Mediation Committee
In accordance with Section 31(3) sentence 1 of the German Co-determination Act, the mediation
committee (‘‘Mediation Committee’’) is responsible for making a proposal to the Supervisory Board
recommending the appointment of a particular candidate if the required majority of two-thirds of the votes
cast by the Supervisory Board is not achieved with respect to the appointment of Management Board
members within one month after initial vote. The same applies if the required majority for a dismissal of
certain Management Board members is not achieved in the initial vote.
Pursuant to our articles of association, our Mediation Committee is composed of the Supervisory Board’s
chairman, the Supervisory Board’s deputy chairman and two other members, one elected by the
shareholder representatives and one by the employee representatives of the Supervisory Board.
Currently, Dr. Rauhut, Mr. Ortner, Dr. Ohler and Mr. Sikorski are the members of our Mediation
Committee.
Nomination Committee
Our nomination committee (‘‘Nomination Committee’’) is responsible for making proposals to the
Supervisory Board for the Supervisory Board’s proposals to the General Shareholders Meeting with
respect to the election of Supervisory Board members representing the shareholders.
The Nomination Committee is composed of the two shareholder representatives on the Executive
Committee.
Currently, Dr. Rauhut and Mr. Gerlinger are the members of our Nomination Committee.
Audit Committee
Our audit committee (‘‘Audit Committee’’) is responsible for, in particular, the oversight of our accounting
process, the effectiveness of our internal control system, our risk management system and our internal
auditing system, as well as the audit of our financial statements by our statutory auditors, including their
independence and any additional services provided by them, the conclusion of the engagement letter with
our auditors, the determination of certain areas on which the audit will focus and the fee arrangement with
our external auditors as well as compliance. Our Audit Committee is in charge of preparing the
Supervisory Board’s resolutions on the annual financial statements (including consolidated financial
statements) and the Supervisory Board’s proposal to the General Shareholders Meeting regarding the
election of our external auditors. At least one member of our Audit Committee has to be independent and
an ‘‘audit committee financial expert,’’ having special knowledge and experience in the application of
accounting standards and internal accounting control processes. Members of the Supervisory Board and
the Audit Committee are considered to be independent if such members have no business or personal
relations with Siltronic AG, its Management Board, controlling shareholders or related parties which could
cause a substantial and not merely temporary conflict of interest. In particular, in order to be considered
independent, a member of the Supervisory Board and the Audit Committee may not, other than in his or
her capacity as a member of the Supervisory Board, the Audit Committee or any other Supervisory Board
committee, (i) accept any consulting, advisory or other compensatory fee from us and (ii) be an affiliated
person of ours or any of our subsidiaries. The Audit Committee consists of three members and has to
include one employee representative. The members of the Audit Committee are Mr. Jonas (chairman),
Dr. Rauhut and Mr. Ortner.
115
Remuneration and Other Benefits of the Members of the Supervisory Board
Our articles of association provide that the members of the Supervisory Board receive an annual
compensation of A 30,000 for their services, which is payable after the expiration of the fiscal year.
Supervisory Board members who join or leave office on the Supervisory Board during the course of a fiscal
year receive pro rata compensation. The chairman and the deputy chairman of the Supervisory Board, as
well as committee chairmen and committee members receive compensation which is a certain multiple of
the base compensation of A 30,000 for each Supervisory Board member. The applicable multiplier is
determined taking into account the following factors: The role of chairman of the Supervisory Board is
attributed factor 3, the roles of deputy chairman of the Supervisory Board, as well as chairman of any
Supervisory Board committee are attributed factor 2, and the role of member of any Supervisory Board
committee, except for the Mediation Committee, is attributed factor 1.5. Supervisory Board members who
perform multiple functions on the Supervisory Board are attributed the highest individual factor for any of
their functions. The factors for various different functions are, however, not aggregated.
Pursuant to our articles of association, our Supervisory Board members also receive expense
reimbursement and an attendance fee for each physical meeting of the Supervisory Board and a
Supervisory Board committee which they attend personally in an amount of A 2,500 per day of meetings.
Supervisory Board members (i) attending such physical meetings via telephone or by way of video
transmission or (ii) voting through a proxy representation (Stimmbotenerklärung) do not receive an
attendance fee. For meetings scheduled as a telephone or video conference, the attendance fee is reduced
to A 1,250 per day of meetings. In addition, we reimburse the reasonable expenses of the Supervisory
Board members.
In addition, we provide Supervisory Board members with reasonable insurance protection; in particular,
we purchase D&O insurance for the benefit of the Supervisory Board member.
However, Supervisory Board members representing our shareholders do not receive any remuneration.
During the 2014 fiscal year, the total remuneration received by Supervisory Board members was
A 0.2 million.
Shareholdings of the Members of the Supervisory Board in Siltronic AG
As of the date of this prospectus, the members of our Supervisory Board do not hold any shares or options
on shares in Siltronic AG.
E.
CERTAIN INFORMATION REGARDING THE MEMBERS
MANAGEMENT AND SUPERVISORY BOARD
OF THE
MANAGEMENT BOARD, SENIOR
In the last five years, no member of the Management Board, senior management or Supervisory Board has
been convicted of fraudulent offences.
been associated with any bankruptcy or receivership acting in its capacity as a member of any
administrative, management or supervisory body or as a senior manager.
been associated with any liquidation acting in its capacity as a member of any administrative, management
or supervisory body or as a senior manager.
In the last five years, no official public incriminations and/or sanctions have been made by statutory or
legal authorities (including designated professional bodies) against the members of the Management
Board, senior management or Supervisory Board, nor have sanctions been imposed by the aforementioned
authorities.
No court has ever disqualified any of the members of either board from acting as a member of the
administrative, management, or supervisory body of an issuer, or from acting in the management or
conduct of the affairs of any issuer for at least the previous five years.
Following the completion of this Offering, Dr. Joachim Rauhut and Dr. Tobias Ohler of Wacker Chemie
AG’s management board, Sieglinde Feist of the Selling Shareholder’s management board and Harald
Sikorski of Wacker Chemie AG’s supervisory board will be a member of our supervisory board. In
addition, certain members of our supervisory board own shares or options to purchase shares in Wacker
Chemie AG. Aside from these exceptions, there are no conflicts of interest or potential conflicts of interest
116
between the members of the Management Board, senior management and Supervisory Board as regards
the Company on the one side and their private interests, membership in governing bodies of companies, or
other obligations on the other side.
Neither the members of the Management Board, nor senior management nor the Supervisory Board have
entered into a service agreement with a Group company that provides for benefits upon termination of
employment or office.
There are no family relationships between the members of the Management Board, senior management
and the Supervisory Board, either among themselves or in relation to the members of the other body.
F.
CONTROLLED COMPANY
Immediately following the completion of this Offering (assuming placement of 4,411,765 New Shares,
6,000,000 Existing Shares and 1,561,764 Over-Allotment Shares, and further assuming an Offer Price at the
mid-point of the Price Range), Wacker Chemie AG will own (directly and indirectly) 59.3 percent of our
outstanding ordinary shares. Assuming the placement of 6,000,000 Existing Shares and further assuming
the placement of 5,000,000 New Shares and 3,947,368 New Shares, respectively (resulting in gross proceeds
for the Company of approximately A 150 million at the lower end and upper end, respectively, of the Price
Range), and 1,650,000 Over-Allotment Shares at the lower end and 1,492,105 Over-Allotment Shares at
the upper end of the Price Range, Wacker Chemie AG will continue to directly and indirectly hold
approximately 57.8 percent and 60.5 percent, respectively, of the Company’s share capital. Therefore, after
the completion of the Offering, we will be a ‘‘controlled company’’ under the German Stock Corporation
Act (Aktiengesetz) irrespective of where the Offer Price will be set within the Price Range. Controlled
companies under German Stock Corporation Act (Aktiengesetz) are companies of which more than
50 percent of the shares or 50 percent of the voting power is held by an individual, a group or another
company.
According to sections 17 and 18 of the German Stock Corporation Act (Aktiengesetz), a controlled
enterprise is presumed to be dependent on the controlling enterprise and to form a de facto group
(faktischer Konzern) of companies with the controlling enterprise. A de facto group is different from a
situation where a domination agreement is in place between the parent company and a subsidiary, as was
the case between the Wacker group and us through Wacker Chemie AG’s wholly-owned subsidiary
Wacker-Chemie Dritte Venture GmbH until December 31, 2014. In a de facto group, the parent company’s
control is exercised by its ‘‘de facto’’ ability to use its voting power to approve resolutions of the general
shareholders meeting, which require a simple majority of votes, irrespective of how the other shareholders
in attendance vote. Such simple-majority resolutions include, for example, decisions concerning the
election and removal of supervisory board members elected by the shareholders and decisions concerning
the payment of dividends. However, the controlling shareholder is in general not entitled to issue any form
of instructions to the management board of the controlled enterprise and the management board of the
controlled enterprise remains solely responsible for managing the affairs of the company. Furthermore, the
controlling enterprise must act in the best interests of the controlled enterprise and the management board
of the controlled enterprise must not grant the controlling enterprise privileged access to information. In
addition, rules on the preservation of share capital and the rules imposing liability on shareholders and
third parties who intentionally use their influence over the company to induce the officers of the company
to act to the detriment of the controlled company (or its shareholders) also continue to apply.
One important exception is that, although the controlling enterprise may not issue instructions to the
management board of the controlled enterprise, it may use its influence to persuade the management
board to enter into individual transactions or carry out other individual measures that are disadvantageous
for the controlled enterprise (but in the interests of the wider group), provided that (i) such disadvantages
are quantifiable and (ii) by the end of the relevant fiscal year the controlling enterprise has fully
compensated (or undertaken to fully compensate) the controlled enterprise for the disadvantages. If these
conditions are met, the rules referred to above regarding privileged access to information, preservation of
share capital and liability for ‘undue influence’ will not apply to the relevant transaction or measure. This
exception applies only to specific identifiable measures where the disadvantages for the controlled
enterprise are quantifiable. It does not permit the controlling shareholder to exert influence in a more
general manner.
If the controlling enterprise fails to compensate the controlled enterprise on time, the controlling
enterprise and any members of its management body who were involved in the relevant transaction will be
117
liable in damages to the controlled enterprise and its shareholders pursuant to Section 317 of the German
Stock Corporation Act (Aktiengesetz).
The obligation to compensate the controlled enterprise for any disadvantages caused is further
safeguarded by Section 312 of the German Stock Corporation Act (Aktiengesetz), pursuant to which the
management board of the controlled company must submit a dependency report (Abhängigkeitsbericht) to
the controlled company’s auditors and supervisory board. The dependency report (Abhängigkeitsbericht)
lists all legal transactions that the controlled company entered into with, or for the benefit of, the
controlling company or its affiliated companies and comments on the benefits and disadvantages of each
listed transaction for the controlled enterprise. Any failure to duly fulfill the reporting obligation may
result in liability for the members of the management board of the controlled company pursuant to
Section 318 of the German Stock Corporation Act (Aktiengesetz).
G.
CODE
OF
CONDUCT
AND
ETHICS
As long as we are majority owned by Wacker Chemie AG, we will follow Wacker Chemie AG’s code of
conduct and ethics, for which all of our employees and members of our Management Board and
Supervisory Board are held accountable, including those officers responsible for financial reporting.
Wacker Chemie AG’s code of conduct and ethics addresses, among other things, law-abiding conduct and
compliance with applicable law, corruption prevention, conflicts of interest, information and data
protection, diversity and discrimination, sustainability and environmental protection, health and safety and
protection of company property as well as fair, accurate and timely disclosure in its reporting and public
communications.
The code of conduct and ethics is available on our website at www.siltronic.com and on Wacker Chemie
AG’s website.
H.
GERMAN CORPORATE GOVERNANCE CODE
The German Corporate Governance Code as amended on June 24, 2014 (the ‘‘Code’’) makes proposals
concerning the management and supervision of German-listed companies. It is based on internationally
and nationally recognized standards of good, responsible governance. The Code contains
recommendations (‘‘shall provisions’’) and suggestions (‘‘should provisions’’) for corporate governance in
relation to shareholders and the shareholders’ meeting, the management board and the supervisory board,
transparency and accounting and auditing of financial statements. Compliance with the Code’s
recommendations or suggestions is not obligatory. German stock corporation law only requires the
management board and the supervisory board of a listed company to provide an annual statement
regarding whether or not the recommendations in the Code were complied with, or explain which
recommendations have not been complied with and are not being applied and the reasons underlying this
non-compliance. The declaration of compliance must be publicly available on the Company’s website at all
times. The current version of the Code was adopted on June 24, 2014 and published in the German
Federal Gazette (Bundesanzeiger) on September 30, 2014.
Prior to the listing of the Company’s shares on the Frankfurt Stock Exchange, the Company is not subject
to the obligation to render a declaration as to compliance with the Code. The Company currently complies,
and following the listing of the Company’s shares on the Frankfurt Stock Exchange intends to comply, with
the recommendations of the Code except for the followings:
•
D&O deductible for Supervisory Board members: According to the Code, a deductible is to be
agreed upon for the members of the supervisory board when taking out a D&O policy. The D&O
insurance of our Supervisory Board members does not provide for a deductible. In our view, such a
deductible is not in itself suitable to increase the performance and sense of responsibility of the
members of the Supervisory Board. In addition, our Supervisory Board members have limited control
over our corporate strategy and business operations and receive only a small compensation for their
board membership compared to our Management Board members. Finally, it reduces the
attractiveness of positions within the Supervisory Board and thus our opportunities in competition for
qualified candidates.
•
Consideration of women on the Management Board: We highly value diversity in our company,
including an appropriate representation of women on our Management Board. However, expertise—
including experience gained abroad—and qualifications are key criteria for us. For this reason, we do
118
not consider it expedient to prioritize ‘‘the aim of appropriate representation of women’’ over
expertise and qualifications.
•
Announcements of proposed candidates for the chair of the Supervisory Board: We do not intend to
announce candidates for the chair of the Supervisory Board until they have been appointed.
•
Compensation of Management Board: According to the Code, both total compensation and variable
compensation of Management Board members have to be capped. Total compensation comprises all
monetary compensation elements including pension and other fringe benefits and awards. For pension
schemes, the Supervisory Board is to establish the level of benefits aimed for in each case. We intend
to fund the pensions of our Management Board as required according to the existing pension scheme,
which may require greater contributions in some years due to low interest rates and the development
of other actuarial assumptions. Thus we are unable to cap the pension component of the
compensation. We have, however, capped the variable part of the compensation of our Management
Board members.
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PART 14: SECURITY OWNERSHIP
A.
SECURITY OWNERSHIP
As of the date of this prospectus, our sole shareholders are Wacker Chemie AG, a German stock
corporation (Aktiengesellschaft) organized under the laws of Germany and registered under docket number
HRB 150884 with the commercial register maintained by the local court (Amtsgericht) of Munich,
Germany, and Wacker-Chemie Dritte Venture GmbH, a German company with limited liability
(Gesellschaft mit beschränkter Haftung) organized under the laws of Germany and registered under docket
number HRB 125702 with the commercial register maintained by the local court (Amtsgericht) of Munich,
Germany. The Selling Shareholder, Wacker-Chemie Dritte Venture GmbH, is a wholly-owned subsidiary
of Wacker Chemie AG and directly owns 90 percent of our share capital.
Wacker Chemie AG’s and the Selling Shareholder’s principal executive offices are both located at HannsSeidel-Platz 4, 81737 Munich, Germany. Wacker Chemie AG has a 100 percent ownership interest in
Siltronic AG (ten percent direct and 90 percent indirect). Our shareholders’ percentage ownership before
this Offering is based on 25,000,000 ordinary shares (with a nominal value of A 4.00 each).
After giving effect to this Offering, Wacker Chemie AG will own 8.5 percent directly and 64.6 percent
directly and indirectly, and Wacker-Chemie Dritte Venture GmbH will directly own 56.1 percent of our
ordinary shares assuming placement of 4,411,765 New Shares and no exercise of the Underwriters’ option
to purchase additional ordinary shares (Wacker Chemie AG will own 8.5 percent directly and 59.3 percent
directly and indirectly, and Wacker-Chemie Dritte Venture GmbH will directly own 50.8 percent of our
ordinary shares assuming full exercise of the Underwriters’ option to purchase additional ordinary shares).
Our shareholders’ percentage ownership after this Offering is based on 29,411,765 ordinary shares (with a
nominal value of A 4.00 each) outstanding immediately after the completion of this Offering. The Selling
Shareholder has granted the Underwriters an option to purchase up to 1,650,000 additional ordinary
shares to cover over-allotments, if any.
B.
CONTROLLING INTEREST
Wacker Chemie AG, directly and indirectly, owns more than 30 percent of the voting rights in the
Company and is, therefore, considered to hold a controlling interest in the Company pursuant to the
German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz).
Assuming a placement of (i) 4,411,765 New Shares, (ii) 6,000,000 Existing Shares and (iii) 1,561,764
Over-Allotment Shares, Wacker Chemie AG will continue to hold, directly and indirectly, approximately
59.3 percent of the Company’s share capital. As a result, Wacker Chemie AG will continue to hold a
controlling interest in the Company pursuant to the German Securities Acquisition and Takeover Act
(Wertpapiererwerbs- und Übernahmegesetz).
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PART 15: CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In accordance with IAS 24, transactions with persons or companies which are, inter alia, members of the same
group as the Company or which are in control of or controlled by the Company must be disclosed, unless they
are already included as consolidated companies in our audited consolidated financial statements. Control exists
if a shareholder owns more than one half of the voting rights in the Company or, by virtue of an agreement, has
the power to control the financial and operating policies of our management. The disclosure requirements under
IAS 24 also extend to transactions with associated companies (including joint ventures) as well as transactions
with persons who have significant influence on our financial and operating policies, including close family
members and intermediate entities. This includes the members of the Management Board and Supervisory
Board (or the members of the corresponding governing bodies of Siltronic AG) and close members of their
families, as well as those entities over which the members of the Management Board and Supervisory Board or
their close family members are able to exercise a significant influence or in which they hold a significant share of
voting rights.
Set forth below is a summary of such transactions with related parties for the fiscal years ended December 31,
2014, December 31, 2013 and December 31, 2012, the three months ended March 31, 2015 and for any interim
period up to and including the date of this prospectus. Further information, including quantitative amounts, of
related party transactions are contained in the notes to our unaudited financial statements for the three months
ended March 31, 2015 and our audited consolidated financial statements for the fiscal years ended
December 31, 2014, December 31, 2013 and December 31, 2012, which are included in the section ‘‘Financial
Information’’ of this prospectus on page F-2 et seqq. Business relationships between companies of the Group are
not included. The companies which are directly or indirectly controlled by the Company are listed under section
‘‘Scope of Consolidation—Subsidiaries’’ of the notes to our audited consolidated financial statements for the
fiscal years ended December 31, 2014, December 31, 2013 and December 31, 2012.
A.
RELATIONSHIP
WITH
WACKER CHEMIE AG
The following is a summary of certain material terms of the agreements that we entered into with Wacker
Chemie AG.
Services Agreements
In February 2004, we entered into a services framework agreement (the ‘‘Services Framework
Agreement’’) with Wacker Chemie AG. The Services Framework Agreement was restated and amended
with effect as of January 1, 2015, pursuant to which Wacker Chemie AG agreed to provide us with certain
products, process media (such as chemicals, electricity, steam and water) and services, including, among
others, the following:
•
technical engineering
•
materials management and procurement
•
site services rendered at the production site
in Burghausen
•
legal (excluding compliance) and tax
•
accounting(1)
•
security and fire prevention services
•
treasury, finance and risk management
•
canteen and cafeteria services
•
human resources(1)
•
bus transportation for employees
(1)
Selected services only.
According to the Services Framework Agreement, we and Wacker Chemie AG are to agree annually on
the volume of the products and process media to be delivered and the scope of the services to be rendered
on an ongoing basis for the coming year, however, we are obliged to purchase, and Wacker Chemie AG is
obliged to render, certain services until the respective services are terminated according to the applicable
notice periods of one, two or five years. If we are unable to agree, the amounts and the scope, as the case
may be, that were previously agreed will remain in place until an agreement is reached. We are to request
products and services which we only require on a case-by-case basis, with sufficient lead time for Wacker
Chemie AG. The prices of site services, business services and process media are based upon the cost to
Wacker Chemie AG of sourcing or generating the relevant materials and making them available to us or of
rendering the relevant services, plus an additional margin in each case. No additional margin is applied to
process media which is sourced from a third party (including electricity) and materials which Wacker
Chemie AG centrally purchases and which we may purchase on a case-by-case basis according to the terms
121
of the Services Framework Agreement. Unless otherwise agreed or covered through netting procedures,
we are obligated to make payments to Wacker Chemie AG on a monthly basis for the products delivered
and services rendered in the respective preceding month.
The Services Framework Agreement has an indefinite term. The agreement may be terminated by either
party upon five years’ prior notice as of the end of a calendar year. The applicable notice period for
specific services under the Services Framework Agreement varies depending on the type of service, from
five years for site services in Burghausen and the supply of process media, to two years for business services
and one year for certain other services. In case we terminate site services in Burghausen, the supply of
process media or business services agreed under the Services Framework Agreement (other than for
cause), we are obligated to reimburse Wacker Chemie AG for certain costs incurred by Wacker Chemie
AG which Wacker Chemie AG cannot mitigate, for a period of one year after the termination of the
respective service under the Services Framework Agreement. Additionally, we are obligated to reimburse
Wacker Chemie AG for assets that were primarily or exclusively used for us and five years of depreciation
costs for certain other assets. Alternatively, we have the right to acquire such assets from Wacker Chemie
AG at book value. Furthermore, we are required to reimburse Wacker Chemie AG for certain residual
personnel costs (unless we or a third party hires the relevant personnel) for 18 months after termination of
the respective service under the Services Framework Agreement. In the event of a change of control,
Wacker Chemie AG is entitled to a shortened notice period of only six months with regard to group
auditing and other services, which Wacker Chemie AG can no longer render due to legal or other reasons
(for example legal and tax services), except where such shortened notice would prove an undue hardship
for us.
Under the Services Framework Agreement, we have a claim against Wacker Chemie AG in the event of
damages resulting from certain delays caused by Wacker Chemie AG in the amount of up to A 100,000 per
incident, unless the resulting damage is covered by insurance, in which case Wacker Chemie AG is
required to pass on any insurance payments to us. Wacker Chemie AG is also liable for its failure to meet
its obligations under the Services Framework Agreement up to an aggregate amount of A 5 million per year
(which limit does not apply in the case of willful conduct), unless the damage is covered by insurance, in
which case Wacker Chemie AG is required to pass on any insurance payments to us. In addition, under the
Service Framework Agreement, Wacker Chemie AG owes us the same standard of care as it applies when
dealing with its own affairs (Sorgfalt in eigenen Angelegenheiten).
Wacker Chemie AG also provides us with IT services pursuant to an IT services framework agreement (the
‘‘IT Framework Agreement’’). The IT Framework Agreement was entered into with effect as of April 2008
and was restated and amended with effect as of January 1, 2015. The prices are based upon the cost to
Wacker Chemie AG of rendering the services plus an additional margin. We and Wacker Chemie AG are
to agree annually on updated price lists for the IT services to be rendered. The IT Framework Agreement
has an indefinite term and may be terminated by either party by giving two years’ notice from the end of a
calendar year. In the event of a termination by us (other than for cause), we are obligated to reimburse
Wacker Chemie AG for certain residual costs (the same provisions as described above with regard to the
Services Framework Agreement apply). Wacker Chemie AG is liable for damages only in case of willful
conduct or gross negligence. Moreover, Wacker Chemie AG’s liability under the IT Framework Agreement
is limited to A 3 million per calendar year (except in the case of willful conduct). If the relevant damage is
covered by insurance, Wacker Chemie AG is required to pass on any insurance payments to us.
Wacker Chemie AG also provides certain IT and corporate services to our foreign subsidiaries based on
separate IT and corporate services agreements.
We also entered into an addendum agreement with Wacker Chemie AG for the supply of ultrapure water
with effect as of March 2011.
Polysilicon Supply Agreement
We have historically purchased large volumes of polysilicon from Wacker Chemie AG and have entered
into a new polysilicon and chlorosilane supply agreement (‘‘Polysilicon Supply Agreement’’) with Wacker
Chemie AG effective as of October 1, 2014 to secure a large portion of our future polysilicon requirements
through 2020, replacing the previously existing polysilicon and chlorosilane supply agreements.
Under the Polysilicon Supply Agreement, we will purchase from Wacker Chemie AG and Wacker Chemie
AG will supply us with polysilicon and chlorosilane products manufactured by Wacker Chemie AG. The
supply of polysilicon is based on an annual delivery plan. The annual delivery plan is to be agreed on by
122
October 15th each year and includes our estimated aggregate polysilicon requirements, estimated
minimum purchase commitment, planned purchase volume and the planned volume mix for the upcoming
calendar year.
By the 16th calendar day of each month, we are to provide Wacker Chemie AG with a rolling forecast of
our expected monthly order volumes covering a period of 12 months, of which the first two months are
binding.
We agreed on specified minimum quantities with regard to the polysilicon supply during the term of the
Polysilicon Supply Agreement, starting January 1, 2015. We are obligated to purchase from Wacker
Chemie AG at least 90 percent of our actual demand for polysilicon and Wacker Chemie AG is obligated
to supply us with our planned purchase volume plus up to 15 percent additional volume if requested. In
case our actual demand is lower than our estimated minimum purchase commitment set forth in the
annual delivery plan, we are still required to purchase at least 85 percent of the estimated minimum
purchase commitment as determined in the annual delivery plan, even if that amount exceeds our actual
demand. However, we agreed with Wacker Chemie AG that we will enter into good faith negotiations in
case of severe and unforeseen market disturbances leading to a lower actual demand, so as to find a
reasonable solution, taking into account the legitimate interests of both parties. Minimum quantity
requirements will not apply if the polysilicon provided by Wacker Chemie AG does not meet the requisite
product specifications. In case of a breach of our minimum purchase obligations, we are liable for damages
to Wacker Chemie AG unless Wacker Chemie AG is able to sell the respective quantities not purchased by
us to a third party at a purchase price equal to or exceeding the price owed by us. If we have a higher
demand for polysilicon, we agreed with Wacker Chemie AG that we will enter into good faith discussions
with a view to satisfying such additional demand, provided that sufficient capacities are available at Wacker
Chemie AG.
Wacker Chemie AG has also agreed to keep back-up stock in Burghausen of each polysilicon product,
corresponding to the average monthly quantity purchased by us during the preceding three months.
With regard to the delivery of chlorosilane, we agreed to provide Wacker Chemie AG with a monthly
rolling forecast of our expected order volumes, covering a period of three month, of which the first two
months are binding. There is no minimum purchase commitment or minimum supply obligations with
regard to chlorosilane. In addition, we and Wacker Chemie AG agreed to have part of the chlorosilane be
supplied by a third party supplier in the course of 2015. While it is intended that Wacker Chemie AG will
stop supplying chlorosilane to our site in Freiberg and our subsidiary Siltronic Singapore Pte. Ltd. once an
agreement has been reached with a third party supplier, Wacker Chemie AG will continue to supply
chlorosilane to our site in Burghausen.
We agreed on fixed purchase prices for polysilicon through December 31, 2015. Purchase prices for the
calendar years starting January 1, 2016 will be negotiated on an annual basis. The purchase prices will be
negotiated within a range relative to the prices for the preceding year.
Wacker Chemie AG provides certain warranties under the Polysilicon Supply Agreement with respect to its
polysilicon products conforming to the specifications set forth in the Polysilicon Supply Agreement. Except
for such warranties, Wacker disclaims any and all other warranties or guarantees with respect to any
materials supplied under the Polysilicon Supply Agreement. With the exception of willful conduct, Wacker
Chemie AG is not liable for any consequential damages and its liability under the Polysilicon Supply
Agreement is limited to A 8 million per calendar year. Wacker Chemie AG’s liability for claims relating to
injury to a person’s life, body or health are not limited.
The Polysilicon Supply Agreement has a fixed term ending on December 31, 2020. After the expiration of
the initial term, the agreement will be automatically renewed for successive periods of two calendar years
unless either party notifies the other party by giving two years written notice. Either party may terminate
the agreement if, among others, the other party commits a material breach of the agreement and fails to
remedy such breach within 30 days after receipt of a written notice from the non-breaching party or if the
other party files for liquidation, bankruptcy, receivership, reorganization or dissolution.
Under the Polysilicon Supply Agreement, each party is obligated to maintain the confidentiality of
confidential information of the other party during the term of the agreement and for five years thereafter.
123
SSW Polysilicon Supply Agreement
Our subsidiary SSW has historically purchased large volumes of polysilicon from Wacker Chemie AG. In
November 2014, the existing polysilicon supply agreement (the ‘‘SSW Polysilicon Supply Agreement’’) was
amended and restated to ensure a stable supply of SSW’s polysilicon requirements for use in
manufacturing 300 mm semiconductor silicon wafers for semiconductor applications.
Under the SSW Polysilicon Supply Agreement, SSW will purchase from Wacker Chemie AG and Wacker
Chemie AG will supply SSW with polysilicon products manufactured by Wacker Chemie AG as specified in
purchase orders.
SSW will provide Wacker Chemie AG on the last business day of each calendar quarter with a rolling
forecast of its expected order volumes covering a period of 12 months, starting three months ahead of the
date of such forecast. SSW guarantees to Wacker Chemie AG that the actual order volume for the period
of the order forecast will not deviate by more than ten percent from the order forecast for the respective
month.
SSW and Wacker Chemie agreed on the following minimum quantities with regard to the polysilicon
supply during the term of the SSW Polysilicon Supply Agreement: From January 1, 2014 until
December 31, 2014, SSW was obligated to purchase from Wacker Chemie AG at least 80 percent of SSW’s
actual requirements for polysilicon. Starting January 1, 2015, SSW is obligated to purchase from Wacker
Chemie AG at least 100 percent of SSW’s actual requirements for polysilicon. As of January 1, 2020,
SSW’s minimum purchase requirement for polysilicon will be 70 percent of its actual requirements for
polysilicon. Minimum quantity requirements will not apply if the polysilicon provided by Wacker Chemie
AG does not meet requisite product specifications.
SSW and Wacker Chemie AG agreed on fixed purchase prices for polysilicon until the end of 2015.
Purchase prices for the calendar years starting January 1, 2016 will be negotiated on an annual basis. The
purchase price will be negotiated within a range relative to the prices for the preceding year.
Wacker Chemie AG provides certain warranties under the SSW Polysilicon Supply Agreement with respect
to its polysilicon products, including that the product supplied to SSW will be free of defects and will
conform to certain specifications. In addition, Wacker Chemie AG agreed to indemnify SSW for any
liabilities or damages arising out of any intellectual property infringement or misappropriation claims
raised by a third party and personal injury, death or property damage related to any defects in the
polysilicon supplied under the SSW Polysilicon Supply Agreement, subject to an indemnity from SSW for
the benefit of Wacker Chemie AG for personal injury, death or property damage caused by SSW’s own
failure, request or instruction, or act. Wacker Chemie AG’s liability under the SSW Polysilicon Supply
Agreement is limited to $ 10 million per calendar year.
The SSW Polysilicon Supply Agreement has a fixed term ending on December 31, 2019. After the
expiration of the initial term, the agreement will automatically renew for successive periods of two
calendar years unless either party notifies the other party by giving two years’ written notice. Either party
may terminate the agreement if, among others, the other party commits a material breach of the
agreement and fails to remedy such breach within 30 days after written notice from the non-breaching
party, if the SSW Agreement is terminated for any reason whatsoever (see ‘‘Part 12: Business—L. SSW’’),
or if the other party files for liquidation, bankruptcy, receivership, reorganization or dissolution. Under the
SSW Polysilicon Supply Agreement, each party is obligated to maintain the confidentiality of confidential
information of the other party during the term of the agreement and for five years thereafter.
Labor Support Agreement
In December 2014, we entered into a labor support agreement (the ‘‘Labor Support Agreement’’) with
Wacker Chemie AG pursuant to which we agreed that Wacker Chemie AG will hire (without recourse) up
to 500 of our employees by the end of 2019. Wacker Chemie AG has agreed to hire 70 employees involved
in production each year for six years, commencing in 2014, and an additional eighty employees not
involved in production in the course of 2014 and 2015.
Pursuant to the agreement, Wacker Chemie AG agreed to hire these employees, establish new
employment agreements with them, and to assume all compensation obligations resulting from their
employment by us (including agreed benefits, deferred compensation and bonuses). In return, we agreed
to an advanced payment of A 78,000 to Wacker Chemie AG for each of the up to 500 employees to be
transferred to Wacker Chemie AG for a total of A 39 million, which we paid to Wacker Chemie AG in
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December 2014. In addition, we agreed to compensate Wacker Chemie AG for compensation obligations
resulting from such employees’ employment with us (including agreed benefits, deferred compensation and
bonuses), calculated on the basis of provisions we made with respect to such compensation obligations in
accordance with IFRS.
At the beginning of each year, a steering committee is in charge of creating a binding list of employees
representative of our employee population in terms of age, education, qualifications, potential limitations/
disabilities and other qualities, to be transferred to Wacker Chemie AG. Wacker Chemie AG may only
decline to hire employees listed for legal reasons (in particular objections by the works council in
accordance with the Works Constitution Act – Betriebsverfassungsgesetz) and must reimburse us an amount
of A 78,000 for any employee not hired. If an employee cannot be transferred for reasons beyond Wacker
Chemie AG’s control, such as due to the employee’s objections to employment by Wacker Chemie AG,
Wacker Chemie AG is under no obligation to reimburse us for such employee. We do not have any further
remedy against Wacker Chemie AG, other than Wacker Chemie AG’s reimbursement, if Wacker Chemie
AG fails to hire the employees on the list. With regard to the eighty employees not involved in production,
Wacker Chemie AG is required to reimburse us an amount of A 78,000 for each employee not hired on or
before March 31, 2016 (parties may extend the period until March 31, 2017), unless the employee cannot
be transferred for reasons not within the control of Wacker Chemie AG.
Wacker Chemie AG may terminate the Labor Support Agreement by giving two months’ notice if due to a
change in economic circumstances, a continuation of the agreement would impose an unreasonable burden
on Wacker Chemie AG. In the event of termination, Wacker Chemie AG has agreed to reimburse us
A 78,000 for each of the employees not hired. If Wacker Chemie AG were to terminate for good cause
(particularly due to material breach, insolvency or inability to pay on our part), Wacker Chemie AG would
be freed of its obligation to reimburse us.
Indemnification and Cost Reimbursement Agreement
On May 28, 2015, we entered into an agreement with the existing shareholders regarding their assumption
of certain Offering-related expenses and liability risks. As required by law, our existing shareholders will
reimburse us for all external expenses that are incurred in connection with the preparation and the
execution of the Offering on a pro rata basis calculated according to the ratio of the number of ordinary
shares offered by the Selling Shareholder to the ordinary shares placed in the Offering. The expenses to be
reimbursed on such basis include, in particular, legal, auditor and other advisor fees, underwriters’
commissions and other costs of the Offering. The expense reimbursement obligation of the existing
shareholders remains unaffected if the Offering is postponed or cancelled. For the preparation and
execution of the Offering, we did not book any expenses in 2014 or through the first quarter of 2015 which
are covered by the indemnification and cost reimbursement agreement and would have been borne or
reimbursed by the Selling Shareholder pro rata as described above. Costs incurred by the Wacker group
related to the Offering will be reimbursed by the Company pro rata in accordance with the principles
described above.
As required by law, the existing shareholders further agreed to indemnify us from and against all liability
risks in connection with the Offering on a pro rata basis, including the pro rata share of all reasonable legal
expenses related to the defense against Offering related claims. In addition, we have agreed, upon
indemnification by the existing shareholders and to the extent legally permissible, to assign certain claims
that we may have against our Management Board members or third parties to the Selling Shareholder.
Shareholder Loan Agreements
On the basis of a master borrowing agreement entered into in June 2014 (the ‘‘Old Credit Facility’’),
Wacker Chemie AG granted us a credit facility for advances of up to twelve months in the total amount of
up to A 150 million (or the equivalent amount in other currencies) for general business purposes until
December 31, 2014, which was renewable annually at the option of Wacker Chemie AG. The Old Credit
Facility was never drawn and has been replaced with a new facility.
On the basis of a master borrowing agreement dated December 22, 2014 and as amended in February
2015, replacing all previous borrowing agreements, including the Old Credit Facility, Wacker Chemie AG
granted us a new credit facility in the total amount of up to A 150 million for general business purposes.
The master borrowing agreement was initially entered into for a fix term of three months and is thereafter
automatically extended by successive periods of one month each until terminated by either party by giving
one month’s written notice. The credit facility was fully drawn on December 29, 2014. The loan originally
125
was to mature on March 30, 2015, but in February 2015, the maturity was extended until June 30, 2015.
The interest expense for the period from December 22, 2014 to June 30, 2015 amounts to A 704,550. The
line of credit will automatically terminate and become due and payable on the date on which Wacker
Chemie AG ceases to own, directly or indirectly, 100 percent of the Company’s shares and voting rights.
We intend to use the proceeds from this Offering to repay amounts drawn under this facility.
We are party to a cash pooling agreement with Wacker Chemie AG under which Wacker Chemie AG acts
as a management agent for a cash pooling arrangement with Siltronic AG and other members of the
Wacker group. In connection with this cash pooling agreement, the cash of all Wacker group entities,
including our company, is automatically pooled at Wacker Chemie AG. Likewise, any negative balance on
any of our accounts is automatically settled by transfer of funds by Wacker Chemie AG to our accounts.
Thus, our accounts are set to zero each day. We receive daily interest on funds extended to Wacker
overnight, paid on a quarterly basis. We are also allowed to have a negative balance under the cash pooling
agreement of up to A 30 million. We pay interest on any funds ‘‘overdrawn’’ in this manner. The rate at
which interest is paid or received by Siltronic AG is tied to a reference market rate with a spread of
+75 basis points on a negative balance and 40 basis points on a positive balance. The cash pooling
agreement will automatically terminate when Wacker Chemie AG ceases to own, directly or indirectly,
100 percent of the Company’s shares.
Domination and Profit and Loss Transfer Agreement
For the fiscal years 2009 through 2014, we were subject to a PLTA with Wacker-Chemie Dritte
Venture GmbH, a wholly-owned subsidiary of Wacker Chemie AG. Under the PLTA, we were ultimately
required to carry out our business at the direction of Wacker Chemie AG in accordance with Section 308
of the German Stock Corporation Act (Aktiengesetz) and to transfer all profits to Wacker-Chemie Dritte
Venture GmbH. Wacker-Chemie Dritte Venture GmbH was required to cover all losses incurred by us and
not covered by profits retained during the term of the PLTA in accordance with Section 302 of the German
Stock Corporation Act (Aktiengesetz). The PLTA was terminated with effect as of the end of our fiscal year
2014. See also ‘‘Part 10: Management’s Discussion and Analysis of Financial Condition and Results of
Operations—B. Factors Affecting the Comparability of Our Results—Our Relationship with the Wacker
Group—Profit and Loss Transfer Agreement.’’
Development Framework Agreement
We entered into a development framework agreement (the ‘‘Development Framework Agreement’’) with
Wacker Chemie AG in 2004, as amended in December 2014, which provides a framework for joint
development and other collaboration between us and Wacker Chemie AG.
Under the agreement, the parties may agree to conduct one or more joint development programs, the
specific terms and conditions of which will be set forth in a separate statement of work for each joint
development program. Each statement of work will designate which party will be the owner of the
intellectual property and technology developed under the program.
Other Agreements
Furthermore, we entered into certain other agreements with companies of the Wacker group, including
lease and grid fee agreements with regard to our properties in Munich and Burghausen, agency
agreements with regard to the sale of our products and license agreements, and other ordinary course
contracts. In addition, the Company has agreed to notify Wacker Chemie AG prior to undertaking any
action which may violate covenants in Wacker Chemie AG’s finance contracts under which the Company is
listed as a material subsidiary.
B.
DESCRIPTION
YEARS
OF
TRANSACTIONS
AND
LOANS
WITH
RELATED PARTIES
IN
LAST THREE FINANCIAL
Transactions with related parties cover transaction with (i) our controlling parent Wacker Chemie AG and
the ultimate controlling shareholder of Wacker Chemie AG, Dr. Alexander Wacker Familiengesellschaft
mbH (holding more than 50 percent of the voting shares in Wacker Chemie AG), (ii) SSW before
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January 24, 2014, (iii) Samsung, the minority shareholder of SSW, (iv) Pensionskasse der Wacker Chemie
VVaG and (v) members of the Management Board and Supervisory Board of the Company.
Three months period
ended March 31,
2015
(in E millions)
(unaudited)
Sales . . . . . . . . . . .
Cost of goods sold .
Interest income . . .
Interest expense . .
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37.4
50.3
0.0
0.3
2014
2013
2012
(in E millions)
(audited)
119.3
178.8
0.6
1.1
24.5
217.5
6.4
0.0
39.6
254.2
5.9
0.0
In 2014, 2013 and 2012, sales include research and development services in an amount of A 2.0 million,
A 3.3 million and A 5.0 million, respectively, to Wacker Chemie AG. The Group recognized sales to SSW of
A 0.8 million in 2014 before January 24, 2014, A 11.5 million in 2013 and A 23.0 million in 2012. Sales were
generated by license fees, services and the sale of intermediate products.
Cost of goods sold primarily relate to (i) raw materials and site services rendered in Burghausen by Wacker
Chemie AG and (ii) to wafers purchased from SSW for trade purposes.
In addition, we made advance payments to Pensionskasse der Wacker Chemie VVaG in each of the years
2014 and 2013 in an amount of A 9.5 million.
Inventories, receivables and liabilities from related parties shown in the consolidated statement of financial
position as of the financial years ending on December 31, 2014, 2013 and 2012, respectively, were as
follows:
Year ended
March 31,
2015
(in E millions)
(unaudited)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof Wacker Chemie AG . . . . . . . . . . . . .
Trade receivables . . . . . . . . . . . . . . . . . . . . . .
of which Samsung and SSW . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . .
thereof Wacker Pensionskasse . . . . . . . . . . . .
thereof SSW . . . . . . . . . . . . . . . . . . . . . . . .
Financial receivable from Wacker Chemie AG
Financial liability towards Wacker . . . . . . . . . .
Loan to SSW . . . . . . . . . . . . . . . . . . . . . . . .
Trade liabilities . . . . . . . . . . . . . . . . . . . . . . .
Thereof Wacker Chemie AG . . . . . . . . . . . . .
Thereof SSW . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . .
Thereof prepayments from Samsung . . . . . . .
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10.4
10.4
7.6
7.6
7.3
7.3
—
—
142.3
—
19.0
19.0
—
53.9
53.9
2014
2013
2012
(in E millions)
(audited)
12.3
12.3
10.6
10.6
9.8
9.5
—
—
176.0
—
9.6
9.6
—
54.1
54.1
3.0
3.0
5.7
5.6
18.3
9.5
8.6
271.5
0.0
142.6
4.8
0.9
3.9
—
—
4.0
4.0
5.0
5.0
8.5
8.5
0.0
149.7
0.0
170.2
9.5
5.3
4.2
—
—
The inventories relate to shipments of polysilicon from Wacker Chemie AG and increased due to the
consolidation of SSW because SSW also purchases polysilicon from Wacker Chemie AG.
The financial receivable from Wacker Chemie AG represents our cash pooling with the Wacker group. The
financial liability towards Wacker Chemie AG represents amounts outstanding under the A 150.0 million
shareholder loan granted to us by Wacker Chemie AG and, in 2014, also includes borrowings of
A 26.0 million under our cash pooling arrangements with the Wacker group.
In December 2014, we entered into a labor support agreement with Wacker Chemie AG pursuant to which
we paid A 39.0 million to Wacker Chemie AG, see ‘‘Part 15: Certain Relationships and Related Party
Transactions—A. Relationship with Wacker Chemie AG—Labor Support Agreement.’’
127
PART 16: EXCHANGE CONTROLS AND LIMITATIONS AFFECTING SHAREHOLDERS
There are currently no legal restrictions in Germany on international capital movements and foreignexchange transactions, except in limited embargo circumstances relating to certain areas, entities or
persons as a result of applicable resolutions adopted by the United Nations and the European Union.
Restrictions currently exist with respect to, among others, Afghanistan, Al-Qaida, Belarus, Burma/
Myanmar, Central African Republic, Congo, Egypt, Eritrea, Guinea, Guinea-Bissau, Iran, Iraq, Ivory
Coast, Lebanon, Liberia, Libya, North Korea, Russia, Somalia, Sudan, Syria, Tunisia, Ukraine, Yemen and
Zimbabwe.
For statistical purposes there are, however, limited reporting requirements regarding transactions involving
cross-border monetary transfers. With some exceptions, every corporation or individual residing in
Germany must report to the German Central Bank (Deutsche Bundesbank) (i) any payment received from,
or made to, a non-resident corporation or individual that exceeds A 12,500 (or the equivalent in a foreign
currency) and (ii) any claim against, or liability payable to, a non-resident or corporation in excess of
A 5 million (or the equivalent in a foreign currency) at the end of any calendar month. Payments include
cash payments made by means of direct debit, checks and bills, remittances denominated in Euro and
other currencies made through financial institutions, as well as netting and clearing arrangements.
Neither German law nor our articles of association restrict the right of non-resident or foreign owners of
shares in our Company to hold or vote such shares.
128
PART 17: GENERAL INFORMATION ON SILTRONIC AG AND OUR GROUP
A.
CORPORATE FORMATION
AND
LEGAL INFORMATION
Our company, Siltronic AG, was established by Wacker-Chemitronic Gesellschaft für ElektronikGrundstoffe mbH, Burghausen, as sole shareholder, as a limited liability company called Wacker Siltronic
Gesellschaft für Halbleitermaterialien mbH, with registered capital amounting to Deutsche Mark 50,000
and a registered office in Burghausen. Our company was registered with the commercial register of the
local court of Traunstein, Germany on January 30, 1995.
On March 5, 1996, we transferred our legal form to a stock corporation (Aktiengesellschaft) formed under
the German Stock Corporation Act (Aktiengesetz) and changed our name to Wacker Siltronic Gesellschaft
für Halbleitermaterialien Aktiengesellschaft. We further changed our name to Wacker Siltronic AG on
July 5, 2002.
On January 22, 2004, we moved our registered office from Burghausen, Germany to Munich, Germany and
changed our name to Siltronic AG. We acquired a major portion of our assets, including our subsidiaries,
as a result of various restructurings within the Wacker group (see ‘‘—E. Group Structure’’).
Siltronic AG is registered in the commercial register of the local court of Munich under docket number
HRB 150884.
B.
COMMERCIAL NAME
AND
REGISTERED OFFICE
The Company’s legal name is ‘‘Siltronic AG.’’ The Group primarily operates under the commercial name
‘‘Siltronic.’’ Our registered office is Hanns-Seidel-Platz 4, 81737 Munich, Germany. Our telephone number
is +49 89 8564-3000.
C.
FISCAL YEAR
AND DURATION
Siltronic AG’s fiscal year is the calendar year. Siltronic AG was established for an unlimited period of time.
D.
CORPORATE PURPOSE
Our business purpose as described in Section 2 of our articles of association is the production and
distribution of products for the electronic and related industries, particular semi-conductors products, as
well as the domestic and international research and development in this area. We are authorized to take all
necessary steps and measures to pursue our business purpose, including the establishment of subsidiaries,
the acquisition and establishment of other companies and the participation in domestic and foreign
companies. We are authorized to actively manage other companies or to limit our activities to holding a
participation. We are authorized to hive-down or otherwise contribute our business, in whole part or in
part, to affiliated entities.
E.
GROUP STRUCTURE
Our German operations are run through Siltronic AG. Our international operations (outside of Germany)
are conducted through various wholly-owned indirect subsidiaries and our subsidiary SSW which are
organized and operated according to the laws of their country of incorporation. Prior to this Offering,
Siltronic AG was wholly owned (in part directly and in part indirectly) by Wacker Chemie AG. Following
this Offering, Siltronic AG will remain a controlled subsidiary of Wacker Chemie AG, and Siltronic AG
and its subsidiaries will remain part of the Wacker group (see ‘‘Part 14: Security Ownership—B. Controlling
Interest’’).
129
The following chart shows our corporate structure as of the date of this prospectus:
Wacker Chemie AG,
Germany
10%
100%
Venture GmbH,
Germany
Siltronic AG,
Germany
90%
100%
Siltronic Holding
International B.V.,
Krommenie, Netherlands
100%
Siltronic Asia
Pte. Ltd.,
Singapore
100%
Siltronic Japan
Corporation,
Tokyo, Japan
100%
Siltronic
Corporation,
Portland, USA
100%
Siltronic
Singapore Pte.
Ltd., Singapore
78%
Siltronic Silicon
Wafer Pte. Ltd.,
Singapore (SSW)
27MAY201503543733
We acquired a major portion of our assets, including our subsidiaries, as a result of various restructurings
within the Wacker group as outlined in the following.
In 1995, we acquired all of the shares in Siltronic Holding Corporation (previously: Wacker Chemical
Corporation and Wacker Semiconductor Holding Corporation, respectively) and as a result, all of the
shares in its wholly-owned subsidiary, Siltronic Corporation (previously: Wacker Siltronic Corporation), by
way of contribution in kind by Wacker-Chemie GmbH. Siltronic Holding Corporation was later merged
into Siltronic Corporation and, in 2008, Siltronic Corporation was transferred to Siltronic Holding
International B.V. by way of a contribution in kind.
In addition, Wacker-Chemitronic Gesellschaft für Elektronik-Grundstoffe mit beschränkter Haftung,
Burghausen, transferred the semiconductor silicon wafer business to us in 1995 by way of a contribution in
kind. At that time, Wacker-Chemitronic Gesellschaft für Elektronik-Grundstoffe mit beschränkter
Haftung, Burghausen, was a subsidiary of Wacker-Chemie GmbH. Wacker-Chemitronic Gesellschaft für
Elektronik-Grundstoffe mit beschränkter Haftung was later merged into Wacker-Chemie GmbH.
In 1995, we acquired from a contracting partner outside the Wacker group all of the shares in Freiberger
Elektronikwerkstoffe Produktions- und Vertriebsgesellschaft mbH, Freiberg, which was merged into our
company with effect as of October 1, 1995.
On November 24, 1999, we established Siltronic Asia Pte. Ltd which, in 2008, was transferred to Siltronic
Holding International B.V. by way of a contribution in kind.
In 2002, we acquired a 100 percent interest in Siltronic Holding International B.V. (which had a
100 percent interest in Siltronic Singapore Pte. Ltd) from Wacker-Chemie GmbH. At that time, Siltronic
Holding International B.V. also owned a 55 percent interest in Siltronic Japan Corporation (previously:
Wacker NSCE Corporation) which was initially run as joint venture with Nippon Steel Corporation until
2003, at which time Nippon Steel Corporation exercised its put option and subsequently transferred the
remaining 45 percent interest in Siltronic Japan Corporation to Siltronic Holding International B.V.
In 2006, we and Samsung established SSW as a joint venture company organized under the laws of
Singapore. With agreements dated January 24, 2014, we agreed to increase our share in SSW from
50 percent to 78 percent by means of a capital increase (see ‘‘Part 12: Business—L. SSW’’).
130
F.
SIGNIFICANT SUBSIDIARIES
The following table provides an overview of the Company’s significant subsidiaries and the Company’s
indirect shareholdings in such subsidiaries. As of December 31, 2014, no amount was outstanding under
the issued shares for each of the below listed subsidiaries.
Name and registered office
Corporate Purpose
Company’s share
(indirectly) of
capital
Issued capital
(IFRS) as of
December 31, 2014
Siltronic Corporation . . . . . . . .
7200 NW Front Avenue,
Portland, OR 97210, USA
Production and distribution of
advanced materials for
manufacturing industries and
any other lawful activity or act
for which corporations may be
organized.
100%
$0
Siltronic Singapore Pte. Ltd. . . .
10 Tampines Industrial
Avenue 5, Singapore 528820
To manufacture silicon and
silicon wafers, to innovate, to
manufacture all kinds of
products, deal in property,
financial matters, and in all
things incidental to this purpose
and those other objectives listed
in Siltronic Singapore Pte. Ltd.’s
articles of association.
100%
SG$100,000
Siltronic Silicon Wafer Pte. Ltd.
12 Tampines Industrial
Avenue 5, Singapore 528759
Development, manufacturing,
distribution and sale of 300 mm
silicon wafers.
78%
SG$753,958,000
G.
STATUTORY AUDITORS
We appointed KPMG, Ganghoferstr. 29, 80339 Munich, Germany, as (i) the statutory auditor of the
Company’s unconsolidated financial statements prepared in accordance with the German Commercial
Code (Handelsgesetzbuch) as of and for the fiscal year ended December 31, 2014, and (ii) the auditor of
our consolidated financial statements prepared in accordance with IFRS as of and for the fiscal years
ended December 31, 2014, December 31, 2013 and December 31, 2012. In each case, KPMG has issued an
unqualified auditor’s report (uneingeschränkter Bestätigungsvermerk). KPMG is a member of the Chamber
of Public Accountants (Wirtschaftsprüferkammer), Munich, Germany.
The unconsolidated financial statements of SSW as of and for the years ended December 31, 2013 and
2012 included in this prospectus beginning on page F-98 were audited by Ernst & Young LLP (Singapore),
1 Raffles Quay, Singapore 048583. Ernst & Young LLP (Singapore) is registered with the Accounting and
Corporate Regulatory Authority in Singapore. The partner-in-charge for the audit of the abovementioned
unconsolidated financial statements of SSW is a member of the Institute of Singapore Chartered
Accountants.
H.
ANNOUNCEMENTS, PAYING AGENT
In accordance with our articles of association, the announcements of our company are published in the
German Federal Gazette (Bundesanzeiger), unless otherwise required by law.
We are entitled in accordance with Section 30b paragraph 3 of the German Securities Trading Act
(Wertpapierhandelsgesetz) to provide information to the shareholders by way of remote data transmission.
In accordance with the German Securities Prospectus Act (Wertpapierprospektgesetz), announcements in
connection with the approval of this prospectus or any supplements thereto will be published in the form of
publication provided for in this prospectus, in particular through publication on our website
(www.siltronic.com). Printed copies of this prospectus and any supplements thereto are available at our
office at Hanns-Seidel-Platz 4, 81737 Munich, Germany.
The paying agent is Deutsche Bank AG. The mailing address of the paying agent is: Taunusanlage 12,
60325 Frankfurt am Main, Germany.
131
PART 18: DESCRIPTION OF SHARE CAPITAL
The following description is a summary of certain information relating to our share capital as well as
certain provisions of our articles of association and the German Stock Corporation Act (Aktiengesetz).
Unless stated otherwise, the description insofar as it relates to our articles of association is based on the
amended version of our articles of association which our General Shareholders Meeting will adopt prior to
the Offering. This summary does not purport to be complete and speaks as of the date of this prospectus.
Copies of our articles of association are publicly available from the commercial register (Handelsregister) of
the local court in Munich, Germany, (electronically at www.unternehmensregister.de) and as an exhibit to
the registration statement of which this prospectus forms a part.
A.
SHARE CAPITAL
As of the date of this prospectus, our share capital amounts to A 100,000,000, divided into 25,000,000 no
par value fully paid up ordinary shares (Stücksaktien). The ordinary shares were created according to
German law by converting the former no par value bearer shares into no par value registered shares
(Namensaktien). This amendment to the Company’s articles of association became effective upon
registration in the commercial register on May 11, 2015.
Additionally, upon registration of the IPO Capital Increase, our share capital is expected to be increased
by up to A 20,000,000 to up to A 120,000,000 and be divided into up to 30,000,000 ordinary shares. The
subscription rights of the existing shareholders will be excluded. It is anticipated that the IPO Capital
Increase will be registered with the commercial register on or about June 9, 2015.
B.
FORM, CERTIFICATION
AND
TRANSFERABILITY
OF THE
SHARES
The Company’s shares are in registered form. The form and contents of our share certificates are
determined by our Management Board with the approval of our Supervisory Board. Our shareholders are
not entitled to receive physical share certificates or have us issue physical share certificates, to the extent
the exclusion of such right is permitted by law and to the extent physical share certificates are not required
by the stock exchange on which the shares are admitted to trading. We are permitted to issue physical
share certificates that represent one or more shares.
The registrar for the shares is registrar services GmbH, Frankfurter Straße 84-90a, 65760 Eschborn,
Germany.
The Company’s share capital is represented by one or more global share certificates deposited with
Clearstream Banking Aktiengesellschaft. All outstanding shares in the Company are no par value ordinary
registered shares.
The Company’s shares are freely transferable under German law, with the transfer of ownership governed
by the rules of the relevant clearing system.
C.
GENERAL PROVISIONS GOVERNING SUBSCRIPTION RIGHTS
In principle, the German Stock Corporation Act (Aktiengesetz) grants all shareholders the right to
subscribe for new shares to be issued in a capital increase. The same applies to convertible bonds, bonds
with warrants, profit participation rights and participating bonds. Subscription rights are freely transferable
and may be traded on German stock exchanges for a prescribed period before the deadline for
subscription expires. However, shareholders do not have a right to request admission to trading of
subscription rights. The shareholders’ meeting may, subject to a majority of at least 75 percent of the share
capital represented at the vote, resolve to exclude subscription rights. Exclusion of shareholders’
subscription rights also requires a report from the Management Board, which must justify and demonstrate
that the company’s interest in excluding subscription rights outweighs the interest of the shareholders in
being granted subscription rights. Excluding shareholders’ subscription rights when new shares are issued is
specifically permissible where:
•
the company is increasing share capital against cash contributions;
•
the amount of the capital increase does not exceed ten percent of the share capital at issue; and
•
the price at which the new shares are being issued is not materially lower than the stock exchange
price.
132
D.
GENERAL PROVISIONS GOVERNING
A
CHANGE
IN THE
SHARE CAPITAL
Under German law, an increase of our share capital generally requires a resolution passed at our General
Shareholders Meeting with a majority of three quarters of the share capital represented at the relevant
General Shareholders Meeting. In its articles of association, a German stock corporation may provide that
a majority of half of the share capital represented at the relevant General Shareholders Meeting is
sufficient in case of capital increases with subscription rights against contributions, capital increases from
company reserves and issuances of convertible bonds, profit participation bonds and other instruments for
which the shareholders have a subscription right. Pursuant to our articles of association and to the extent
permitted by law, any resolution pertaining to an increase in share capital from company resources
requires the vote of a simple majority of the share capital represented at the relevant shareholders’
meeting and a simple majority of the votes cast.
Authorized Capital
Under German law, a stock corporation’s general shareholders’ meeting can authorize the management
board, or, as the case may be, the management board and the supervisory board acting jointly, to issue
shares, including in placements or offerings in which subscription rights of other shareholders are
excluded, in a specified aggregate nominal amount of up to 50 percent of the issued share capital of such
company at the time the resolution becomes effective. The shareholders’ authorization becomes effective
upon registration in the commercial register (Handelsregister) and may extend for a period of no more than
five years thereafter.
Any resolution pertaining to the creation of authorized capital requires a simple majority of the votes cast
and a majority of three quarters of the share capital represented at the relevant shareholders’ meeting.
The aggregate nominal amount of the authorized capital created by the shareholders may not exceed one
half of the share capital existing at the time of registration of the authorized capital with the commercial
register.
Conditional Capital
Under German law, a stock corporation’s general shareholders’ meeting can authorize conditional capital
(bedingtes Kapital) of up to 50 percent of the issued share capital at the time of the resolution. Conditional
capital is share capital that the shareholders have approved in advance for specific purposes subject to the
issuance of the new capital in conformity with the terms of the shareholders’ resolution.
Any resolution pertaining to the creation of conditional capital requires a simple majority of the votes cast
and a majority of three quarters of the share capital represented at the relevant General Shareholders
Meeting.
The aggregate nominal amount of the conditional capital created by the General Shareholders Meeting
may not exceed one half of the share capital existing at the time of the General Shareholders Meeting
adopting such resolution. The aggregate nominal amount of the conditional capital created for the purpose
of granting subscription rights to employees and members of the management of our company or of an
affiliated company may not exceed ten percent of the share capital existing at the time of the General
Shareholders Meeting adopting such resolution.
Any resolution relating to a reduction of our share capital requires a majority of at least three quarters of
the share capital represented at the relevant General Shareholders Meeting as well as a simple majority of
the votes cast.
E.
CHANGES
IN
OUR SHARE CAPITAL
DURING THE
LAST THREE FISCAL YEARS
As of March 31, 2015 our share capital as registered with the commercial register amounted to
A 100 million. During the last three fiscal years, our share capital has not changed.
F.
AUTHORIZED CAPITAL
As of the date of this prospectus, pursuant to Section 4(6) of the articles of association, our Management
Board is authorized, subject to the consent of the Supervisory Board, to increase our share capital by up to
A 50,000,000 through one or more issuances through May 6, 2020, by issuing new no par value ordinary
registered shares (Stückaktien) against cash contributions and/or contributions in kind (the ‘‘Authorized
Share Capital 2015’’). Under the authorized capital shareholders are to be granted subscription rights.
133
However, the Management Board is authorized, with the consent of the Supervisory Board, to exclude the
subscription rights of the shareholders for one or more capital increases from the authorized capital: (i) in
order to exclude fractional amounts from subscription rights; (ii) for the issuance of shares against cash
contributions, if the issuing price of the new shares is not significantly below the market price of the shares
already listed on a stock exchange (within the meaning of sections 203 (1) and (2) and Section 186
(3) sentence 4 of the German Stock Corporation Act (Aktiengesetz)) and the portion of the share capital
attributable to the new shares issued with an exclusion of subscription rights does not exceed a total of ten
percent of the share capital, neither at the time when the authorization takes effect nor, if this amount is
lower, at the time when the authorized share capital is utilized—this limit includes shares issued or
disposed of by direct or mutatis mutandis application of these provisions during the term of this
authorization up to the time of it being exercised, as well as shares to be issued or granted on the basis of a
convertible bond or warrant bond issued during the term of this authorization, with shareholders’
subscription rights excluded in accordance with the provisions of Section 186 (3) sentence 4 of the German
Stock Corporation Act (Aktiengesetz); (iii) if necessary, in order to grant holders of conversion or option
rights or creditors of mandatory convertible bonds or profit-sharing rights or bonds with conversion rights
or warrants which are, or are to be, issued by Siltronic AG or a direct or indirect subsidiary, subscription
rights to newly issued no par value ordinary shares (Stückaktien) of our company to the extent they would
be entitled thereto upon exercise of their conversion or option rights or upon fulfillment of any mandatory
conversion; (iv) for the issuance of shares against contributions in kind, including for, but not limited to,
the purpose of acquiring (also indirectly) businesses, parts of businesses, participations in businesses or
other assets or rights to acquire assets or (v) in order to implement a scrip dividend (Aktiendividende)
where shareholders are entitled to tender their dividend rights as a contribution in kind against issuance of
new shares. The Management Board is authorized to determine any further details of the capital increase
and its implementation, subject to the Supervisory Board’s approval. The Supervisory Board is authorized
to adjust the wording of articles of association after the utilization of the authorized capital or after the
period for the utilization of the authorized capital has expired.
It is intended that, on June 8, 2015, the extraordinary shareholders’ meeting resolving on the IPO Capital
Increase will also resolve to increase the Authorized Capital 2015 to reflect the increase of the share
capital resulting from the IPO Capital Increase (i.e., the authorized capital would be increased to
50 percent of the share capital post IPO Capital Increase). Further, the Authorized Capital 2015 would be
extended until June 7, 2020. Assuming issuance in the IPO Capital Increase of 4,411,765 New Shares in an
effort to achieve gross proceeds of A 150 million at the mid-point of the Price Range, the resulting share
capital of the Company will amount to A 117,647,060 (divided into 29,411,765 ordinary shares with no par
value (Stückaktien)) and the extraordinary shareholder’s meeting of the Company would resolve to amend
the Authorized Capital 2015 to permit the increase of the share capital by up to A 58,823,530 by issuing new
no par value shares until June 7, 2020. The other terms of the Authorized Capital 2015 would remain as
described in the preceding paragraph.
There can be no assurance that the terms of the Authorized Capital 2015 will be amended and registered
as set forth above. If an extraordinary shareholders’ meeting of the Company resolves as currently
anticipated, the relevant amendment of the Articles of Association would be registered with the
commercial register following the registration of the consummation of the IPO Capital Increase.
G.
CONDITIONAL CAPITAL
It is intended that, on June 8, 2015, the extraordinary shareholders’ meeting of the Company will also
resolve on the creation of a conditional capital and corresponding amendment to the articles of
association.
Pursuant to Section 4 para. 7 of the articles of association (as intended to be resolved), the Company’s
share capital will be conditionally increased by A 50,000,000 (50 percent of the stated capital prior to the
registration of the IPO Capital Increase).
Under the conditional but unissued share capital, the share capital of Siltronic AG is conditionally
increased by up to A 50,000,000 through the issuance up to 12,500,000 new no par value ordinary registered
shares (Stückaktien). A capital increase out of conditional capital is only to be effected insofar as the
holders or creditors, as the case may be, of conversion rights or options, or parties required to exercise
conversion rights or profit-sharing rights or bonds with conversion rights or warrants (or a combination
thereof) which have been issued or guaranteed by Siltronic AG or a direct or indirect subsidiary of
Siltronic AG on the basis of an authorization to be resolved by the extraordinary General Shareholders
134
Meeting on June 8, 2015, exercise their conversion rights or options or fulfill their conversion obligations,
or to the extent we exercise a right to deliver shares in lieu of payment of due amounts. The new shares will
participate in the profits from the beginning of the fiscal year in which they are issued and no decision has
been made by the General Shareholders Meeting with regard to the appropriation and use of balance
sheet profits. The Management Board is authorized to determine any further details of the capital increase
out of conditional capital and its implementation,
There can be no assurance that the conditional capital will be created and registered as set forth above. If
an extraordinary shareholders’ meeting of the Company resolves as currently anticipated, the relevant
amendment of the Articles of Association would be registered with the commercial register following the
registration of the consummation of the IPO Capital Increase.
H.
AUTHORIZATION
TO ISSUE
CONVERTIBLE BONDS
AND
OTHER INSTRUMENTS
It is intended that, on June 8, 2015, the extraordinary shareholders’ meeting of the Company will also
resolve on the authorization of the Management Board to issue convertible bonds and/or bonds with
warrants, profit participation rights, and/or income bonds (or combination of these instruments) with the
option of excluding subscription rights..
Assuming resolution on the authorization as planned, the Management Board will be authorized, with the
approval of the Supervisory Board, to issue, once or repeatedly, until June 7, 2020 convertible bonds
and/or bonds with warrants, profit participation rights, and/or income bonds (or any combination of these
instruments) (collectively referred to as ‘‘Bonds’’) having an aggregate principal amount of up to
A 750,000,000 and to grant the holders or creditors option or conversion rights to 12,500,000 shares of the
Company with a maximum proportion of the share capital of A 50,000,000 in accordance with the terms
and conditions of the Bonds. The authorization to issue Bonds sets out certain parameters which include
the following:
The Bonds can carry fixed or variable interest whereby the interest may depend partially or completely on
the amount of the Company’s dividend. The Bonds may also stipulate an obligatory conversion or an
obligation to exercise the option upon maturity or earlier or provide for the right of the Company, in whole
or in part, instead of paying the amounts due to deliver to the holders or creditors of Bonds new shares or
treasury shares of the Company. In the event of an option being exercised or of a conversion, and in the
event of fulfillment of option or conversion obligations, the Company may at its discretion either grant new
shares from conditional capital or authorized capital, or treasury shares. The terms and conditions of the
Bonds may also provide for the right of the Company not to grant shares, but rather to pay the equivalent
value in cash. The option or conversion price for a share amounts to (i) at least 80% of the volumeweighted average stock exchange price of the shares of the Company in the Xetra trading system (or a
comparable successor system) at the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) on the last ten
trading days prior to the date on which the resolution on the issue of the Bonds is adopted by the
Management Board, or (ii) alternatively, in the event of subscription rights being granted, at least
80 percent of the volume-weighted average stock exchange price of the shares of the Company in the Xetra
trading system (or a comparable successor system) at the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) in the period from the start of the subscription period up to and including the day before
notification is given of the definitive terms and conditions of the Bonds pursuant to Section 186 para. 2
German Stock Corporation Act (Aktiengesetz). In case no volume-weighted average stock exchange price
can be determined in the relevant time period, the option or conversion price must amount to at least
80 percent of the closing price of the shares of the Company in the Xetra trading system (or a comparable
successor system) at the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) on the last trading day
before the day on which the final price for the Bonds is determined. In case of Bonds with a mandatory
conversion obligation or with an obligation to exercise the option right or a put option entitling the
Company to deliver shares, the conversion or option price may either be at least equal to the minimum
price set out above or correspond to the average volume-weighted price of the shares of the Company in
the Xetra trading system (or a comparable successor system) at the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) on at least three trading days immediately prior to the calculation of the conversion or
option price as defined in more detail by the terms and conditions of the Bonds, even if the average price is
below the minimum price (80 percent).
The terms and conditions of the Bonds may also provide for certain anti-dilution mechanisms pursuant to
which the option or conversion rights and obligations may—notwithstanding any applicable law—be
adjusted to retain value, if during the term of the Bonds the financial value of the existing option or
135
conversion rights and obligations is diluted. The terms and conditions of the Bonds may also provide for a
cash compensation instead of granting subscription rights or changing the conversion price. The Bonds
may also be issued by companies in which the Company has a direct or indirect majority share. In such
case, the Management Board is authorized, subject to the approval of the Supervisory Board, to provide
for a guarantee for the repayment of the Bonds for the issuing company and to grant holders or creditors
of such Bonds shares of the Company in order to satisfy the conversion or option obligations conceded
with such Bonds. Shareholders have, in principle, subscription rights to the Bonds. The Bonds may also be
acquired by one or several banks or enterprises within the meaning of Section 186 para. 5 sentence 1
German Stock Corporation Act (Aktiengesetz), subject to the obligation to offer them to shareholders for
subscription.
The Management Board may, with the approval of the Supervisory Board, exclude subscription rights to
the Bonds in certain cases and under certain conditions, including (i) if the Bonds are issued for cash
payment, provided that the issue price is not significantly lower than the theoretical market price as
determined in accordance with generally accepted, in particular recognized actuarial calculation methods
and that the Bonds carry option or conversion rights and/or option or conversion obligations to shares with
a proportionate amount of the share capital which must not exceed ten percent of the Company’s share
capital at the time said authorization comes to effect or – in case such amount is lower – the authorization
is exercised; any shares shall count towards the threshold of ten percent of the registered share capital that
(a) are issued or sold during the term and up to the time of exercising of the authorization, in direct or
analogous application of Section 186 para. 3 sentence 4 of the German Stock Corporation Act
(Aktiengesetz) or (b) are issued to satisfy subscription rights or conversion obligations arising from Bonds,
provided that such Bonds are issued subject to the exclusion of the shareholders’ subscription rights in
analogous application of Section 186 para. 3 sentence 4 German Stock Corporation Act (Aktiengesetz)
following the date on which this authorization becomes effective; (ii) if the Bonds are issued against
contributions in kind, provided that the value of the contribution in kind is proportionate to the market
value of the Bonds; (iii) for fractional amounts; or (iv) if the Bonds are issued to grant holders of previous
issued bonds subscription rights to the extent they would have been entitled to as shareholders after
exercising option or conversion rights or after fulfilling option or conversion obligations.
To the extent that profit participation rights or income bonds are issued that do not carry option or
conversion rights and/or option or conversion obligations, the Management Board shall be authorized,
with the approval of the Supervisory Board, to exclude subscription rights of shareholders overall if these
profit participation rights or income bonds are structured in the same way as bonds, i.e., do not constitute
any membership rights in the Company, do not grant any participation in liquidation proceeds and the
amount of interest is not calculated on the basis of the amount of net income, unappropriated net income,
or the dividend. In this case, the interest and the issue price of the profit participation rights or income
bonds shall also correspond to comparable borrowings under current market conditions on the issue date.
The Management Board is authorized, with the approval of the Supervisory Board, to stipulate further
particulars and terms of the Bonds in accordance with the parameters of the authorization.
There can be no assurance that the authorization will be resolved as set forth above.
I.
REPURCHASE
AND
SALE
OF
TREASURY SHARES
We cannot subscribe for our own ordinary shares. We may also not acquire our own shares unless
authorized by the General Shareholders Meeting or in other very limited circumstances as set out in the
German Stock Corporation Act. The General Shareholders Meeting may not grant a share repurchase
authorization lasting for a term of more than five years. The rules in the German Stock Corporation Act
generally limit repurchases to ten percent of the share capital of a German stock corporation and resales
must generally be made either on a stock exchange, in a manner that treats all shareholders equally, or in
accordance with the rules that apply to subscription rights relating to a capital increase.
We currently do not hold any own shares, nor does a third party on our behalf or account. However, by
resolution of the extraordinary shareholders’ meeting held on May 7, 2015, the Management Board has
been authorized, with the approval of the Supervisory Board, to purchase up to a total of ten percent of its
share capital existing at the time of the adoption of the resolution until May 6, 2020. The acquired shares,
together with other treasury shares which may be in the possession of the Company or are attributable to it
pursuant to Sections 71d and 71e of the German Stock Corporation Act (Aktiengesetz), if any, may at no
time exceed ten percent of the Company’s registered share capital. At the discretion of the Management
Board, the shares can be acquired via the stock exchange, through a public offering made to all
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shareholders of the Company or a public solicitation to submit offers. The authorization provides for
certain thresholds by defining a minimum and maximum consideration for the acquisition of a treasury
share. In case of an acquisition via the stock exchange, the consideration for a treasury share may not
exceed the market price for one share of the Company in the opening auction in the Xetra trading system
(or a comparable successor system) at the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) on the
relevant trading day by more than ten percent and may not be more than ten percent lower than that price.
In case of a public offering or a public solicitation the consideration may not exceed the volume weighted
average stock exchange price of the shares of the Company in the Xetra trading system (or a comparable
successor system) at the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) on the last ten trading
days before the day of the announcement of the decision of such public offering or acceptance of offers
made by shareholders, by more than ten percent and may not be more than ten percent lower. The
treasury shares may be used for any purpose permitted by law. Apart from selling them via the stock
exchange or through an offer to all shareholders, the Management Board is authorized, with the approval
of the Supervisory Board, to sell the treasury shares against cash consideration under exclusion of
subscription rights, provided that the selling price is not significantly lower than the market price and that
the amount of treasury shares to be sold does not exceed ten percent of the registered share capital at the
time the disposal is resolved. Moreover, the treasury shares can be offered and transferred against
contribution in kind under exclusion of subscription rights, in particular, in the course of mergers or the
acquisition of companies, used in order to satisfy the rights of creditors of bonds carrying conversion or
option rights or, respectively, conversion obligations issued by the Company or affiliated companies in
which the Company holds a majority participation. Finally, the treasury shares can also be cancelled
without an additional shareholders’ resolution.
J.
GENERAL SHAREHOLDERS MEETING
Pursuant to our articles of association, General Shareholders Meetings take place, at the option of the
body convening our General Shareholders Meeting, either at our registered seat in Munich, Germany, at
the place of a German stock exchange or in a German city with more than 100,000 inhabitants. In general,
General Shareholders Meetings are convened by our Management Board. The General Shareholders
meeting must be called by notice published in the German Federal Gazette (Bundesanzeiger) at least
30 days before the day of the General Shareholders Meeting; the day of the meeting itself and the day of
the receipt of the notice are not included when calculating this period. The Supervisory Board is
additionally permitted to convene a General Shareholders Meeting in certain instances permitted by
German law. Both our Management Board and our Supervisory Board may convene extraordinary
General Shareholders Meetings.
A General Shareholders Meeting must be convened at the request of shareholders whose shares
collectively make up five percent of the capital stock of our company. Shareholders or shareholder
associations may solicit other shareholders to make such a request, jointly or by proxy, in the shareholders’
forum of the German Federal Gazette (Bundesanzeiger), which is also accessible via the website of the
German Company Register (Unternehmensregister).
Prior to a General Shareholders Meeting, shareholders are required to be registered in the share register
of Siltronic AG and register in order to be entitled to participate in the General Shareholders Meeting and
to exercise voting rights.
Under German law, our annual General Shareholders Meeting must take place within the first eight
months of each fiscal year. In addition, pursuant to Section 121(1) of the German Stock Corporation Act
(Aktiengesetz), an extraordinary meeting of the shareholders must be convened by the Management Board
if our interests so require. Among other things, the annual General Shareholders Meeting is required to
decide on the following issues:
•
appropriation and use of balance sheet profits (Bilanzgewinn);
•
discharge or ratification of the actions taken by the members of our Management Board and our
Supervisory Board; and
•
the approval of our statutory auditors.
Unless provided otherwise in the German Stock Corporation Act (Aktiengesetz) or our articles of
association, the resolutions of our General Shareholders Meeting are passed with a simple majority of the
votes cast. Certain resolutions of our General Shareholders Meeting may only be passed with a certain
majority of the share capital present or represented at the meeting. Where applicable, this majority
137
requirement applies in addition to the simple majority of the votes cast. Neither German law nor our
articles of association provide for a minimum participation as a quorum for General Shareholders
Meetings.
Under German law certain specified resolutions of fundamental importance require a majority of at least
three quarters of the share capital present or represented at the meeting at the time of adoption of the
resolution. Resolutions of fundamental importance include, in particular, capital increases with exclusion
of existing shareholders’ preemptive rights, capital decreases, the creation of authorized or conditional
share capital, the dissolution of our company, a merger into or with another company, split-offs and
split-ups, the transfer of all or substantially all of our assets, the conclusion of inter-company agreements
(Unternehmensverträge), in particular domination agreements (Beherrschungsverträge), profit and loss
transfer agreements (Ergebnisabführungsverträge), and a change of the legal form of our company.
Our annual General Shareholders Meeting for 2015 was held on May 7, 2015.
K. SHAREHOLDER NOTIFICATION REQUIREMENTS; MANDATORY TAKEOVER BIDS; DIRECTORS DEALINGS
After the Company’s shares have been admitted to trading on the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse), the Company, as a listed company, its shares and shareholders will be subject to the
provisions of the German Securities Trading Act (Wertpapierhandelsgesetz) governing disclosure
requirements for shareholdings and the provisions of the German Securities Acquisition and Takeover Act
(Wertpapiererwerbs- und Übernahmegesetz).
The German Securities Trading Act (Wertpapierhandelsgesetz) requires that anyone who acquires, sells or
whose shareholding in any other way reaches, exceeds or falls below 3%, 5%, 10%, 15%, 20%, 25%, 30%,
50% or 75% of the voting rights in an issuer whose country of origin is Germany and whose shares are
admitted to trading on an organized market must immediately, and no later than within four trading days
of such fact, notify the issuer and, at the same time, the BaFin. The notice can be drafted in either German
or English and sent either in writing or via fax.
The notice must include the address of the individual or entity, the share of voting rights held and the date
of reaching, exceeding, or falling below the respective threshold. As a domestic issuer, the Company must
publish such notices immediately, but no later than within three trading days after receiving them, via
media outlets or outlets where it can be assumed that the notice will be disseminated in the EU and the
non-European Union parties to the agreement on the EEA. The Company must also transmit the notice to
the BaFin and to the German Company Register (Unternehmensregister) for storage. There are certain
exceptions to the notice requirement.
In connection with these requirements, the German Securities Trading Act (Wertpapierhandelsgesetz)
contains various rules that require the attribution of voting rights of certain persons associated with the
shareholder or acting together with the shareholder. For example, shares belonging to a third company are
attributed to a company if the latter controls the former; similarly shares held by a third company for the
account of another company are attributed to the latter. Shares or financial instruments held for trading by
a securities services company are not taken into account for determining the notification obligation if it is
ensured that the voting rights held by them are not exercised, and that they amount to no more than five
percent of the voting shares, or do not grant the right to purchase more than five percent of the voting
shares.
Any cooperation among shareholders that is designed to effect a permanent and material change in the
business strategy of the Company can result in an attribution (Zurechnung) of voting rights, that is, the
cooperation does not necessarily have to be specifically about the exercise of voting rights. Coordination in
individual cases, however, will not trigger the attribution (Zurechnung) of voting rights.
Failure by a shareholder or person to whom shares are attributed to comply with the shareholder
notification requirements will result in a loss of such shareholder’s voting rights for so long as the
requirements are not complied with. If a shareholder willfully fails to file a notice or provides false
information, the shareholder is excluded from exercising the dividend rights attached to its shares for the
duration of the failure. If the shareholder fails to disclose the number of voting rights held and the
shareholder acted willfully or was grossly negligent, the shareholder is generally not permitted to exercise
the voting rights attached to its shares for a period of six months after he or she files the necessary
notification. In addition, a fine may be imposed for failure to comply with the notification obligation.
Except for the three percent threshold, similar notification obligations exist for any person reaching,
exceeding or falling below the aforementioned thresholds when holding other financial instruments
138
entitling their holder to unilaterally acquire existing shares of the Company carrying voting rights by
binding legal agreement. This obligation extends to ‘‘other instruments’’ that grant the holder the right to
acquire unilaterally, based on a legally binding agreement, existing shares of the Company carrying voting
rights that do not qualify as ‘‘financial instruments’’ within the meaning of the German Securities Trading
Act (Wertpapierhandelsgesetz), for example, securities lending agreements or sales and repurchase
agreements.
In addition, pursuant to Section 25a of the German Securities Trading Act (Wertpapierhandelsgesetz) any
person who directly or indirectly holds financial instruments or other instruments that are not covered by
Section 25 of the German Securities Trading Act (Wertpapierhandelsgesetz), that is, instruments that merely
enable the holder to acquire existing shares carrying voting rights of an issuer whose home country is
Germany, must notify the issuer and, simultaneously, the BaFin immediately, and within four trading days
at the latest, when reaching, exceeding or falling below five percent, ten percent, 15 percent, 20 percent,
25 percent, 30 percent, 50 percent or 75 percent. Accordingly, such financial or other instruments do not
necessarily entitle the holder to claim delivery of the shares. A notification requirement can be triggered if
an acquisition of voting rights is only possible under the economics of the instrument, for instance, if the
counterparty to such financial or other instrument can reduce or mitigate its risk by acquiring the relevant
shares. Therefore, cash-settled equity swaps and contracts for the payment of price differences are subject
to the notification requirement.
A shareholder who reaches or exceeds the threshold of ten percent of the voting rights, or a higher
threshold, is obligated to notify the issuer within 20 trading days regarding the objective being pursued
through the acquisition of voting rights, as well as regarding the source of the funds used for the purchase.
Changes in those objectives must also be reported within 20 trading days. The Articles of Association have
not made use of the option to release shareholders from this disclosure obligation. In calculating whether
the ten percent threshold has been reached or exceeded, the attribution rules mentioned above apply.
Furthermore, pursuant to the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und
Übernahmegesetz), every person whose share of voting rights reaches or exceeds 30 percent of the voting
shares of the Company is obligated to publish this fact, including the percentage of its voting rights, within
seven calendar days by publication on the internet and by means of an electronically operated system for
disseminating financial information and subsequently, unless an exemption from this obligation has been
granted by the BaFin, to submit a mandatory public tender offer to all holders of shares in the Company.
The German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) contains a
series of provisions intended to ensure the attribution of shareholdings to the person who actually controls
the voting rights connected with the shares. If the shareholder fails to give notice of reaching or exceeding
the 30 percent threshold or fails to submit the mandatory tender offer, the shareholder is barred from
exercising the rights associated with these shares (including voting rights and, in case of willful failure to
send the notice and failure to subsequently send the notice in a timely fashion, the right to dividends) for
the duration of the delinquency. A fine may also be imposed in such cases.
Executives of an issuer with ‘‘managerial responsibilities’’ within the meaning of the German Securities
Trading Act (Wertpapierhandelsgesetz) have to notify the issuer and the BaFin within five working days of
transactions (so-called directors’ dealings) undertaken for their own account relating to the shares of such
issuer or to financial instruments based on such shares. This also applies to persons who are ‘‘closely
related to such executives’’ within the meaning of the German Securities Trading Act
(Wertpapierhandelsgesetz).
L.
AMENDMENT
TO THE
ARTICLES
OF
ASSOCIATION
Pursuant to Section 9 of our articles of association, the Supervisory Board is authorized to make
amendments to the articles of association that only impact the form. Any other amendment to our articles
of association requires a resolution of the General Shareholders Meeting and a majority of the votes cast.
M.
LIQUIDATION
Apart from liquidation as a result of insolvency proceedings, we may be liquidated only with a vote of the
holders of at least three-quarters of the share capital represented at the shareholders’ meeting at which
such a vote is taken. If we are liquidated, any liquidation proceeds remaining after all of our liabilities have
been paid off would be distributed among our shareholders in proportion to their holdings in accordance
with German statutory law. The German Stock Corporation Act (Aktiengesetz) provides certain protections
for creditors which must be observed in the event of liquidation.
139
N.
SQUEEZE-OUT
OF
MINORITY SHAREHOLDERS
Under the German Stock Corporation Act (Aktiengesetz), the general shareholders’ meeting of a stock
corporation may resolve, upon request of a shareholder that holds at least 95 percent of the share capital,
that the shares held by any remaining minority shareholders be transferred to this shareholder against
payment of ‘‘adequate cash compensation’’ (Ausschluss von Minderheitsaktionären). This amount must take
into account our full value at the time of the resolution, which is generally determined using the future
earnings value method (Ertragswertmethode). The minority shareholders are entitled to file for valuation
proceedings (Spruchverfahren), in the course of which the appropriateness of the cash compensation is
reviewed.
Under the German Transformation Act (Umwandlungsgesetz), a majority shareholder holding at least
90 percent of a stock corporation’s share capital can request that the general shareholders’ meeting resolve
that the minority shareholders must sell their stock to the majority shareholder against the payment of
adequate compensation in cash, provided that (i) the majority shareholder is a stock corporation, a
partnership limited by shares (KGaA), or a European stock corporation (SE) having its seat in Germany,
and (ii) the squeeze-out is performed to facilitate a merger under the German Transformation Act
between the majority shareholder and the stock corporation. The general shareholders’ meeting approving
the squeeze-out must take place within three months of the conclusion of the merger agreement. The
procedure for the squeeze-out is essentially identical to the squeeze-out under the German Stock
Corporation Act (Aktiengesetz) described above, including the minority shareholders’ option to have the
appropriateness of the cash compensation reviewed.
Pursuant to the provisions of Sections 319 et seq. of the German Stock Corporation Act (Aktiengesetz)
regarding the integration (Eingliederung) of a subsidiary, the general meeting of a stock corporation may
resolve the integration into another company, provided that the future principal company
(Hauptgesellschaft) is a German stock corporation and holds at least 95 percent of the shares of the
company to be integrated. The shareholders of the integrated company are entitled to adequate
compensation, which is generally to be granted in the form of shares of the principal company. The amount
of compensation is to be determined by the so-called merger value ratio (Verschmelzungswertrelation)
between the companies, i.e. the exchange ratio, which would have to be considered adequate in the event
of a merger of the two companies.
O.
DIVIDEND RIGHTS
Under German law, the distribution of dividends on shares for a given fiscal year are generally determined
by a process in which the Management Board and Supervisory Board submit a proposal to our annual
General Shareholders Meeting held in the subsequent fiscal year and our annual General Shareholders
Meeting adopts a resolution. German law provides that a resolution concerning the distribution of
dividends may be adopted only if the company’s unconsolidated financial statements prepared under
German GAAP show a balance sheet profit. In determining the balance sheet profit available for
distribution, the result for the relevant year must be adjusted for profits and losses brought forward from
the previous year and for withdrawals from or transfers to reserves. Certain reserves are required by law
and must be deducted when calculating the profit available for distribution.
Shareholders participate in profit distributions in proportion to the number of shares they hold. Dividends
on shares resolved by the General Shareholders Meeting are paid annually, shortly after the General
Shareholders Meeting, in compliance with the rules of the respective clearing system. Dividend payment
claims are subject to a three-year statute of limitation.
P.
REGISTRATION
OF
SILTRONIC AG
WITH
COMMERCIAL REGISTER
We are a German stock corporation (Aktiengesellschaft, or AG) that is organized under the laws of
Germany, with a registered office in Munich, Germany. We were established as a limited liability company
on January 30, 1995 and changed our legal form into a German stock corporation (Aktiengesellschaft) on
March 5, 1996. We are registered in the commercial register maintained by the local court (Amtsgericht) of
Munich, Germany under docket number HRB 150884.
Q.
LISTING
We intend to apply to list our ordinary shares on the Frankfurt Stock Exchange with simultaneous
admission to the sub-segment of the regulated market with additional post-admission obligations (Prime
Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). It is intended that our ordinary
shares will be admitted to trading on June 10, 2015 and trading will commence under the ticker symbol
WAF on June 11, 2015.
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PART 19: TAXATION
A.
OVERVIEW
OF
MATERIAL GERMAN TAX CONSIDERATIONS
The following section contains a short overview of certain German key tax principles that may be relevant
in the context of the Offering with respect to the acquisition, holding, or transfer of our ordinary shares by
our shareholders. Neither church tax that may be imposed on individual shareholders in Germany nor
inheritance or gift tax is covered in this section.
This overview does not purport to be a comprehensive or exhaustive description of all German tax
considerations that may be relevant to our shareholders. It is based upon domestic German tax laws
(including administrative guidelines) in effect at the date of this prospectus. The legal situation may
change, possibly with retroactive effect, or to different interpretation.
The tax information in this prospectus is not a substitute for tax advice. Prospective investors are
recommended to consult their own tax advisors as to the individual tax consequences arising from the
investment in the shares and the procedures that must be followed to receive a refund of German
withholding tax.
Taxation of Siltronic AG
Corporate income tax
The taxable income of corporations such Siltronic AG, irrespective of whether distributed or retained, is
subject to corporate income tax (Körperschaftsteuer) at a uniform rate of 15 percent plus solidarity
surcharge (Solidaritätszuschlag) of 5.5 percent on the corporate income tax liability, resulting in an
aggregate tax liability of 15.825 percent.
Trade tax
Siltronic AG is further subject to trade tax (Gewerbesteuer) with respect to its taxable trade profit
(Gewerbeertrag) provided that such taxable trade profit is attributable to a permanent establishment
maintained in Germany (inländische Betriebsstätte). The taxable trade profit corresponds in principle to the
profit as determined for corporate income tax purposes. However, certain add-backs and deductions might
result in a lower or higher tax burden. The effective rate of trade tax eventually imposed depends on the
local municipalities in which we maintain our permanent establishments. It amounts in most cases to
approximately seven percent – 17 percent of the taxable trade profit, depending on the local tax multiplier.
Tax losses
Subject to certain restrictions, current year tax losses can be used to offset current year tax gains for both,
corporate income and trade tax purposes. Loss carry-backs to the immediately preceding assessment
period are only permissible for corporate income tax purposes up to A 1 million (they are not permissible
for trade tax purposes). Tax losses which cannot be utilized by means of a loss carry-back can, in principle,
be carried forward indefinitely and can be used to offset taxable income for corporate income tax and
trade tax purposes, limited however to an amount of A 1 million. To the extent that the taxable income
exceeds this threshold, only 60 percent of the exceeding amount can be offset by tax loss carry forwards.
Interest barrier rules
Pursuant to the interest barrier rules, the deductibility of interest expenses exceeding our interest earnings
is limited to 30 percent of our EBITDA of the relevant fiscal year as determined for tax purposes unless a
relevant exception applies. The amount of disregarded interest expenses can be carried forward to
subsequent years and may be deductible subject to the interest barrier rules. EBITDA amounts that could
not be utilized in a tax year may under certain conditions be carried forward into future tax years, however,
the carry-forward period is limited to five years.
Forfeiture of tax loss carry forwards and interest carry forwards
In the case of a direct or indirect transfer within five years of more than 25 percent or, respectively, more
than 50 percent of our share capital or voting rights to one single acquirer or a group of acquirers or in the
case of similar change of ownership (harmful acquisition, schädlicher Beteiligungserwerb), unutilized losses
and interest carry forwards as well as any losses incurred in the current business year until the date of the
transfer are forfeited on a pro rata basis or, as the case may be, in full unless a relevant exception applies.
141
Taxation of Shareholders Tax Resident in Germany
Shares held as private assets
Dividends and capital gains are—as a rule—taxed as investment income and are principally subject to a
25 percent flat tax (plus 5.5 percent solidarity surcharge thereon, resulting in an aggregate tax rate of
26.375 percent) that is discharged via withholding.
The withholding tax on dividends is imposed and discharged on account of our shareholders (i) by a
German resident credit institution or financial services institution (including German permanent
establishments of foreign institutions), a German resident securities trading company or a German
resident securities trading bank which holds the shares in custody and pays out or credits the dividend to
the shareholder or pays out the dividend to a foreign custodian, (ii) by the central securities depository
safekeeping the shares, if the dividend is paid out to a foreign custodian, or (iii) by the Company if and to
the extent the central securities depository safekeeping the shares is not disbursing the dividends (in the
following, ‘‘Dividend Paying Agent’’). Except for the latter case (see above at ‘‘(iii)’’), the Company does
not assume any responsibility for withholding the tax at the source. The withholding tax is assessed on the
basis of the dividend resolved by the annual general meeting.
As regards capital gains, the withholding tax is only imposed where the shares are held in custody with a
German resident credit institution or financial services institution (including German permanent
establishments of foreign institutions), a German resident securities trading company or a German
resident securities trading bank or where such an agent executes the sale of the shares and pays out or
credits the capital gains (in the following, ‘‘Disbursing Agent’’). The withholding tax on capital gains from
the sale of shares held in custody with the Disbursing Agent since their acquisition is assessed on the basis
of the difference between the sales proceeds (after deduction of expenses directly connected to the sale)
and the acquisition cost of the shares. If the Disbursing Agent changed during the holding period of the
shares and if the acquisition costs are not evidenced to the new custodian, the withholding tax is assessed
on the basis of 30 percent of the sales proceeds. The Disbursing Agent has to deduct the withholding tax
from the capital gains and discharge for account of the seller.
The shareholder is taxed on the gross personal investment income, less the saver’s allowance of A 801 (or,
for married couples and for partners in accordance with the registered partnership law (Gesetz über die
eingetragene Lebenspartnerschaft) filing jointly, A 1,602). The deduction of income related expenses actually
incurred is generally not possible. Losses resulting from the sale of shares can only be offset against capital
gains from the sale of shares. Private investors can apply to have their investment income assessed in
accordance with the individual’s tax bracket if this would result in a lower tax burden. However, the
disallowance of the deduction of income-related expenses and the restrictions on offsetting losses also
apply when the investment income of private investors is assessed using the individual’s tax bracket.
Upon application, exceptions from the flat tax regime apply to shareholders that hold at least 25 percent of
the shares in Siltronic AG and shareholders that hold at least 1 percent of the shares in Siltronic AG and
are employed by Siltronic AG.
If, however, a shareholder, or in the case of a gratuitous acquisition, the shareholder’s legal predecessor,
directly or indirectly held at least 1 percent of the share capital of our company at any time during the five
years preceding the sale (in the following, ‘‘Substantial Shareholder’’), 60 percent of any capital gain is
taxable at the individual income tax rate (plus 5.5 percent solidarity surcharge thereon) and,
correspondingly, 60 percent of any capital loss is recognized for income tax purposes.
Shares held as business assets
If shares form part of a German business (including a German permanent establishment of a foreign
business) or a business for which a permanent representative in Germany has been appointed taxation
depends on whether the shareholder is a corporation, an individual or a partnership (co-entrepreneurship,
meaning a partnership engaged or deemed to be engaged in business activities). Irrespective of the legal
form of the business investor, dividends are subject to a 25 percent withholding tax (plus 5.5 percent
solidarity surcharge thereon) that is deducted by the Dividend Paying Agent. Except for case (iii) as above
(see above at ‘‘Shares held as private assets’’), the Company does not assume any responsibility for
withholding the tax at the source. The withholding tax is credited against the respective shareholder’s final
(corporate) income tax liability. To the extent the amount withheld exceeds the (corporate) income tax
liability, the withholding tax will be refunded, provided that certain requirements are met. As regards
capital gains, the withholding tax is only imposed where the shares are held in custody with a Disbursing
142
Agent. However, in general and subject to certain further requirements no withholding deduction applies
on capital gains if (i) the shares are held by a corporation subject to unlimited tax liability in Germany or
(ii) the proceeds from the shares qualify as income of a domestic business and the shareholder notifies this
to the Disbursing Agent by use of the required official form.
(i) Corporations: Dividends received by a corporation are fully subject to corporate income tax
(including solidarity surcharge) unless such corporation directly holds at least ten percent in our equity
capital at the beginning of the relevant calendar year or acquires a stake of at least ten percent in our
equity capital in the course of the relevant calendar year. If the ten percent holding quota is fulfilled by a
corporate shareholder, dividends are, as a rule, effectively 95 percent exempt from corporate income tax
(including solidarity surcharge). However, capital gains are generally effectively 95 percent exempt from
corporate income tax (including solidarity surcharge) irrespective of the size of the shareholding. Please
note however that there are currently discussions to extent the aforementioned ten percent holding quota
to capital gains by way of legislative amendments.
Current business expenses actually incurred in connection with the dividends and capital gains are
deductible for corporate income tax and—subject to certain restrictions—trade tax purposes. Dividends
are fully subject to trade tax, unless the shareholder holds at least 15 percent of our registered share capital
at the beginning of the tax assessment period. In the latter case effectively only 95 percent of the dividends
are also exempt from trade tax. Capital gains, however, are irrespective of the size of the shareholding
95 percent tax exempt from trade tax (regarding potential legislative change, cf. above). Losses incurred,
inter alia, from the sale or write-down of shares are not tax deductible for corporate income tax and trade
tax purposes.
(ii) Individuals: 60 percent of dividends and capital gains are taxed at the individual personal income tax
rate (plus 5.5 percent solidarity surcharge thereon) where the shares are held by an individual as business
assets; correspondingly, only 60 percent of business expenses related to the dividends and capital gains are
deductible for income tax purposes. Trade tax wise, certain restrictions may apply. Dividends are fully
subject to trade tax, unless the individual holds at least 15 percent of our registered share capital at the
beginning of the tax assessment period. In this case the net amount of dividends (after deduction of the
business expenses economically connected to it) are fully tax exempt from trade tax. As regards capital
gains, only 60 percent of the gains are subject to trade tax. 60 percent of any losses from the sale of shares
are tax deductible for income tax and trade tax purposes. All or part of the trade tax is generally credited as
a lump sum against the individual’s income taxes.
(iii) Partnerships (co-entrepreneurships): For (corporate) income tax purposes, partnerships are in
principle transparent. Thus, (corporate) income tax will be assessed and levied only at the level of the
partners considering the rules outlined above (subsection (i) and (ii)). Trade tax, however, is assessed and
levied at the level of the partnership considering the trade tax rules applicable to the partners holding the
interest in the relevant partnership (subsections (i) and (ii)). As regards the question, whether the trade tax
participation threshold of 15 percent discussed in subsection (i) and (ii) above is reached, the shareholding
of the partnership is authoritative. In case the partner is an individual, the trade tax paid by the partnership
is generally credited on a pro-rata basis as a lump-sum against the individual partners’ personal income tax
liability.
With respect to (i) and (iii), special rules apply to credit institutions (Kreditinstitute), financial services
providers (Finanzdienstleistungsinstitute), financial enterprises (Finanzunternehmen), life insurance and
health insurance companies, and pension funds.
Taxation of Shareholders Not Tax Resident in Germany
For shareholders (individuals and corporations) not tax resident in Germany whose shares form part of a
German permanent establishment or a business for which a permanent representative in Germany has
been appointed, the same rules (including credit or refund of the imposed and discharged withholding tax)
apply as to shareholders tax resident in Germany holding the shares as business assets (see above at
‘‘—(i) Corporations’’ and ‘‘—(ii) Individuals’’).
In other cases, dividends received by a foreign shareholder are effectively subject to (final) German
withholding tax at a rate of 25 percent (plus 5.5 percent solidarity surcharge thereon) that is deducted by
the Dividend Paying Agent. The foreign corporate shareholder can apply—subject to certain conditions—
for a reduction of the German withholding tax down to 15 percent (plus a 5.5 percent solidarity surcharge
143
thereon) under German domestic tax laws. In addition, double taxation treaties may provide for additional
relief.
Where dividends are distributed to a company domiciled in another member state of the EU within the
meaning of Article 2 of the Parent-Subsidiary Directive (EU Directive 2011/96/EU of the Council dated
November 30, 2011, as amended, the ‘‘Parent-Subsidiary Directive’’), or a permanent establishment
located in another member state of the EU of a company domiciled in Germany or another member state
of the EU, if the shares are held as business assets of such permanent establishment, the withholding tax is
refunded upon application, provided that the relevant shareholder holds at least ten percent of our
registered share capital (Grundkapital) for a continuous period of at least 12 months subject to further
requirements. In addition, if the requirements are met, the shareholder can apply for exemption from
withholding tax. In order to obtain a refund of or exemption from withholding tax, the relevant
shareholder has to submit an application (in line with official application forms) with the German Federal
Central Office of Taxation (Bundeszentralamt für Steuern, Hauptdienstsitz Bonn-Beuel), An der Küppe 1,
53225 Bonn, Germany.
The exemption from withholding tax in accordance with the Parent-Subsidiary Directive and the
aforementioned relief under double taxation treaties depend on whether certain additional prerequisites
(in particular so-called substance requirements) are fulfilled.
Except for the cases discussed above, capital gains from the sale of shares are only taxable in Germany,
where the seller is a Substantial Shareholder. However, applicable double taxation treaties may provide for
a relief from German taxation in these cases.
Other Taxes
No German transfer tax, value-added tax, stamp duty or similar taxes is assessed on the purchase, sale or
other transfer of shares. Provided that certain requirements are met, business owners may, however, opt
for the payment of value-added tax on transactions that are otherwise tax exempt. Neither net wealth tax
nor financial transaction tax is currently imposed in Germany.
B.
OVERVIEW
OF
MATERIAL LUXEMBOURG TAX
CONSIDERATIONS
The following information is of a general nature only and is based on the laws in force in Luxembourg as of
the date of this prospectus. It does not purport to be a comprehensive description of all the tax
considerations that might be relevant to an investment decision. It is included herein solely for preliminary
information purposes. It is not intended to be, nor should it be construed to be, legal or tax advice. It is a
description of the essential material Luxembourg tax consequences with respect to the Offering and may
not include tax considerations that arise from rules of general application or that are generally assumed to
be known to shareholders. This summary is based on the laws in force in Luxembourg on the date of this
prospectus and is subject to any change in law that may take effect after such date. Prospective
shareholders should consult their professional advisors with respect to particular circumstances, the effects
of state, local or foreign laws to which they may be subject, and as to their tax position. Please be aware
that the residence concept used under the respective headings applies for Luxembourg income tax
assessment purposes only. Any reference in the present section to a tax, duty, levy impost or other charge
or withholding of a similar nature refers to Luxembourg tax law and/or concepts only. Also, please note
that a reference to Luxembourg income tax encompasses corporate income tax (impôt sur le revenu des
collectivités), municipal business tax (impôt commercial communal), a solidarity surcharge (contribution
au fonds pour l’emploi), as well as personal income tax (impôt sur le revenu) generally. Corporate
shareholders may further be subject to net wealth tax (impôt sur la fortune) as well as other duties, levies
or taxes. Corporate income tax, municipal business tax as well as the solidarity surcharge invariably apply
to most corporate taxpayers resident in Luxembourg for tax purposes. Individual taxpayers are generally
subject to personal income tax and the solidarity surcharge. Under certain circumstances, where an
individual taxpayer acts in the course of the management of a professional or business undertaking,
municipal business tax may apply as well.
144
Luxembourg Taxation of Shareholders of a non-resident company
Witholding Taxes
Dividend payments made to shareholders by a non-resident company, such as the Company, as well as
liquidation proceeds and capital gains derived therefrom are not subject to a withholding tax in
Luxembourg.
Income Tax
Taxation of Income Derived From Shares, and Capital Gains Realized On Shares by Luxembourg
Residents
Luxembourg Resident Individuals
Dividends and other payments derived from the shares by resident individual shareholders, who act in the
course of the management of either their private wealth or their professional/business activity, are subject
to income tax at the progressive ordinary rate with a current top effective marginal rate of 40 percent
(44.1 percent including the maximum nine percent solidarity surcharge and the 0.5 percent temporary
equalization tax) depending on the annual level of income of individuals. A tax credit may be granted for
foreign withholding taxes, provided that it does not exceed the corresponding Luxembourg tax. Under
current Luxembourg tax law, 50 percent of the gross amount of dividends received by resident individuals
from a company resident in an EU Member State and covered by Article 2 of the Council
Directive 2011/96/EU of November 30, 2011, as amended (the ‘‘EU Parent-Subsidiary Directive’’), such as
the Company, are exempt from income tax.
Capital gains realized on the disposal of the shares by resident individual shareholders, who act in the
course of the management of their private wealth, are not subject to income tax, unless said capital gains
qualify either as speculative gains or as gains on a substantial participation. Capital gains are deemed to be
speculative and are subject to income tax at ordinary rates if the shares are disposed of within six months
after their acquisition or if their disposal precedes their acquisition. A participation is deemed to be
substantial where a resident individual shareholder holds, either alone or together with his spouse or
partner and/or minor children, directly or indirectly at any time within the five years preceding the
disposal, more than ten percent of the share capital of the Company. A shareholder is also deemed to
transfer a substantial participation if he acquired free of charge, within the five years preceding the
transfer, a participation that was constituting a substantial participation in the hands of the transferor (or
the transferors in case of successive transfers free of charge within the same five-year period). Capital gains
realized on a substantial participation more than six months after the acquisition thereof are subject to
income tax according to the half-global rate method (that is, the average rate applicable to the total
income is calculated according to progressive income tax rates and half of the average rate is applied to the
capital gains realized on a substantial participation). A disposal may include a sale, an exchange, a
contribution or any other kind of alienation of the shares.
Capital gains realized on the disposal of the shares by resident individual shareholders, who act in the
course of their professional/business activity, are subject to income tax at ordinary rates. Taxable gains are
determined as being the difference between the price for which the shares have been disposed of and the
lower of their cost or book value.
Luxembourg Fully Taxable Resident Undertakings with a Collective Character and Luxembourg
Permanent Establishments of Foreign Undertakings with a Collective Character or of Non-resident
Individuals
Dividends and other payments made by the Company to (i) a Luxembourg resident fully-taxable
undertaking with a collective character or (ii) to a Luxembourg permanent establishment of a foreign
undertaking with a collective character or of non-resident individuals are subject to income tax at their
respective ordinary rates.
Under current Luxembourg tax laws, half of the gross amount of dividends received from a company
resident in an EU Member State and covered by Article 2 of the EU Parent-Subsidiary Directive, such as
the Company, is exempt from income tax. A tax credit may further be granted for foreign withholding
taxes, provided it does not exceed the corresponding Luxembourg corporate income tax on the dividends
and other payments derived from the shares.
145
However, under the participation exemption regime, dividends derived from shares of an entity covered by
Article 2 of the amended EU Parent-Subsidiary Directive, such as the Company, may be exempt from
income tax at the level when the shareholder if, at the time of the dividend is made available to the
shareholders, cumulatively, (i) the shareholder is (a) a fully taxable Luxembourg resident undertaking with
a collective character, (b) a Luxembourg permanent establishment of a company covered by Article 2 of
the amended EU Parent-Subsidiary Directive, (c) a Luxembourg permanent establishment of a foreign
undertaking with a collective character in a country having a tax treaty with Luxembourg, or (d) a
Luxembourg permanent establishment of a company limited by share capital or a cooperative company
resident in the EEA other than an EU Member State, (ii) the shareholder has held or commits itself to
hold the shares of the distributing entity (i.e. the Company) for an uninterrupted period of at least twelve
months, (iii) during this uninterrupted period of twelve months, the shares represent a participation of at
least ten percent in the share capital of the Company or a participation of an acquisition price of at least
A1.2 million, and (iv) the dividend is put at its disposal within such period. Liquidation proceeds may be
exempt under the same conditions. Shares held through a tax transparent entity are considered as being a
direct participation proportionally to the percentage held in the assets of the transparent entity. Capital
gains realized by (a) a Luxembourg fully-taxable resident undertaking with a collective character or (b) the
Luxembourg permanent establishment of a non-resident foreign undertaking with a collective character on
the shares of the Company are subject to income tax at the maximum global rate of 29.22 percent in
Luxembourg-City, unless the conditions of the participation exemption regime, as described above, are
satisfied except that the acquisition price must be of at least A6 million for capital gain exemption purposes.
Shares held through a tax transparent entity are considered as a direct participation holding proportionally
to the percentage held in the assets of the transparent entity.
Taxable gains are determined to be the difference between the price for which the shares have been
disposed of and the lower of their cost or book value.
Capital gains realized on the disposal of the shares by a non-resident individual holding the shares through
a Luxembourg permanent establishment are subject to income tax at ordinary rates. Taxable gains are
determined as being the difference between the price for which the shares have been disposed of and the
lower of their cost or book value.
Net Wealth Tax
Shares held by a Luxembourg fully-taxable resident undertaking with a collective character or a
Luxembourg permanent establishment or a permanent representative of a foreign entity of the same type,
to whom or to which shares are attributable, are subject to Luxembourg net wealth tax (impôt sur la
fortune) (‘‘NWT’’) at the rate of 0.5 percent applied on its net assets as determined for NWT purposes.
Net wealth is referred to as the unitary value (valeur unitaire), as determined at January 1 of each year.
The unitary value is basically calculated as the difference between (a) assets estimated at their fair market
value (valeur estimée de réalization or Gemeiner Wert), and (b) liabilities vis-à-vis third parties, unless one
of the exceptions mentioned below is satisfied.
Unless benefiting from a special tax regime, NWT will be levied on the shares in the hands of a
Luxembourg fully taxable resident company or of a Luxembourg permanent establishment of a foreign
company.
Further, in the case of a company covered by Article 2 of the EU Parent-Subsidiary Directive, such as the
Company, the shares may be exempt for a given year, if the shares represent at the end of the previous year
a participation of at least ten percent in the share capital of the Company or a participation of an
acquisition price of at least A1.2 million. The NWT charge for a given year can be reduced if a specific
reserve, equal to five times the NWT to save, is created before the end of the subsequent tax year and
maintained during the five following tax years. The maximum NWT to be saved is limited to the corporate
income tax amount due for the same tax year, including the employment fund surcharge, but before
imputation of available tax credits.
Other Taxes
Under Luxembourg tax law, where an individual shareholder is a resident of Luxembourg for inheritance tax
purposes at the time of his/her death, the shares are included in its taxable basis for inheritance tax purposes.
Gift tax may be due on a gift or donation of the shares if the gift is recorded in a Luxembourg notarial
deed or otherwise registered in Luxembourg.
146
C.
OVERVIEW
OF
MATERIAL U.S. TAX CONSIDERATIONS
The following discussion is a general summary under present law of certain U.S. federal income tax
considerations relevant to the purchase, ownership and disposition of the ordinary shares. This summary is
based upon the U.S. Internal Revenue Code of 1986, as amended, or the ‘‘Code,’’ administrative
pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as in effect
on the date hereof. These laws are subject to change, possibly with retroactive effect.
The summary is not a complete description of all tax considerations that may be relevant. It applies only to
U.S. Holders (as defined below) that purchase ordinary shares in this offering, hold the ordinary shares as
capital assets and use the U.S. Dollar as their functional currency. It does not address the tax treatment of
persons subject to special rules, such as financial institutions, dealers or traders, insurance companies,
regulated investment companies, real estate investment trusts, tax exempt entities, persons deemed to own
ten percent or more of our share capital, holders liable for the alternative minimum tax, persons holding
ordinary shares as part of a hedge, straddle, conversion or constructive sale transaction or persons holding
ordinary shares in connection with a permanent establishment in Germany or Luxembourg. It also does
not address U.S. state and local tax considerations or Medicare contribution taxes.
As used in this section, ‘‘U.S. Holder’’ means a beneficial owner of ordinary shares that, for U.S. federal
income tax purposes, is (i) a U.S. citizen or individual resident of the United States, (ii) a corporation, or
other entity taxable as a corporation, created or organized under the laws of the United States or its
political subdivisions, (iii) a trust subject to the control of one or more U.S. persons for all substantial
decisions and the primary supervision of a U.S. court (or otherwise if the trust has a valid election in effect
under current Treasury regulations to be treated as a U.S. person) or (iv) an estate the income of which is
subject to U.S. federal income tax without regard to its source.
The U.S. federal income tax treatment of a partner in a partnership purchasing, owning and disposing of
ordinary shares generally will depend on the status of the partner and the activities of the partnership.
Partners in a prospective purchaser that is a partnership should consult their own tax advisors regarding
the specific U.S. federal income tax consequences to them of the partnership’s acquisition, ownership and
disposition of ordinary shares.
Dividends
Subject to the passive foreign investment company rules discussed below, dividends on the ordinary shares
(including the amount of German tax withheld) should generally be included in a U.S. Holder’s gross
income as ordinary income from foreign sources on the date of the U.S. Holder’s receipt of the dividend.
Dividends will not be eligible for the dividends-received deduction generally available to U.S. corporations.
Dividends should qualify for the preferential tax rate available for qualified dividend income of individuals
and certain other non-corporate U.S. Holders if we are not a passive foreign investment company
(‘‘PFIC’’) in the year of distribution or the preceding year and the holder meets certain holding period and
other requirements. Dividends paid in currency other than U.S. Dollars will be includable in income in a
U.S. Dollar amount based on the exchange rate in effect on the date of receipt whether or not the payment
is converted into U.S. Dollars at that time. Any gain or loss on a subsequent conversion of the Euro into
U.S. Dollars for a different amount generally will be U.S. source ordinary income or loss and will not be
treated as a dividend.
A U.S. Holder eligible for benefits under the income tax treaty between Germany and the United States
may claim a reduced 15 percent rate of German withholding tax. Each U.S. Holder should consult its own
tax adviser about its eligibility for reduction of German withholding tax. A U.S. Holder may claim a
deduction or a foreign tax credit (subject to other applicable limitations) only for tax withheld at the
appropriate rate. An election to deduct foreign income taxes instead of claiming foreign tax credits applies
to all taxes paid or accrued in the taxable year to foreign countries and U.S. possessions. For purposes of
the U.S. foreign tax credit limitation, dividends received with respect to the ordinary shares should
generally constitute ‘‘passive category income.’’ The rules governing foreign tax credits or deductions are
complex and each prospective investor is urged to consult its own tax advisor regarding the availability of
foreign tax credits or deductions under its particular circumstances.
Disposition
A U.S. Holder will recognize capital gain or loss on the sale or other disposition of ordinary shares in an
amount equal to the difference between the U.S. Holder’s adjusted tax basis in the ordinary shares and the U.S.
147
dollar value of the amount realized from the disposition. A U.S. Holder’s adjusted tax basis in the ordinary
shares generally will be its U.S. Dollar cost. Any gain or loss generally will be treated as arising from U.S.
sources. It will be long-term capital gain or loss if the holder has held ordinary shares for more than one year as
of the time of the disposition. Deductions for capital losses are subject to significant limitations.
A U.S. Holder that receives foreign currency on the disposition of ordinary shares will realize an amount
equal to the U.S. Dollar value of the currency received at the spot rate on the date of sale (or, in the case
of cash basis and electing accrual basis U.S. Holders, the settlement date). An accrual basis U.S. Holder
that does not elect to determine the amount realized using the spot rate on the settlement date will
recognize foreign currency gain or loss equal to the difference between the U.S. Dollar value of the
amount received based on the spot exchange rates in effect on the date of sale or other disposition and the
settlement date. A U.S. Holder will have a tax basis in the currency received equal to the U.S. Dollar value
of the currency received on the settlement date. Any gain or loss on a subsequent conversion of the
currency for a different amount generally will be U.S. source ordinary income or loss.
Passive Foreign Investment Company
Special U.S. tax rules apply to companies that are considered to be passive foreign investment companies
(‘‘PFICs’’). A foreign corporation will be a PFIC in any taxable year when, taking into account the income
and assets of certain subsidiaries, either (i) 75 percent or more of its gross income is passive income or
(ii) 50 percent or more of the average quarterly value of its assets is attributable to assets that produce or
are held to produce passive income. For this purpose, passive income generally includes, among other
things, dividends, rents, royalties and gains from the disposition of investment assets (subject to various
exceptions). In applying these tests, a non-U.S. corporation that directly or indirectly owns at least
25 percent by value of the stock of another corporation is treated as if it held its proportionate share of the
other corporation’s assets and received directly its proportionate share of the other corporation’s income.
Based on our present assets, income and activities, we believe we are not a PFIC, for U.S. federal income
tax purposes, for our preceding taxable year, and we believe we are unlikely to become a PFIC. However,
the PFIC determination is made annually, and a company’s status could change depending, among other
things, upon changes in the composition and relative value of gross receipts and assets and the market
value of its stock. Accordingly, no assurance can be given that we will not be a PFIC in the current or any
future taxable year. In the event that, contrary to our expectation, we were to be classified as a PFIC, a
U.S. Holder could be subject to material adverse tax consequences including being subject to greater
amounts of tax on gains and certain distributions on the ordinary shares as well as increased reporting
obligations. U.S. Holders should consult their tax advisors about the possibility that we might be classified
as a PFIC and the consequences if we were classified as a PFIC.
Information Reporting and Backup Withholding
Dividends on and proceeds from the sale or other disposition of the ordinary shares may be reported to the
U.S. Internal Revenue Service (‘‘IRS’’) unless the holder is a corporation or otherwise establishes a basis
for exemption. Backup withholding may apply to amounts subject to reporting if the holder fails to provide
an accurate taxpayer identification number and certifies that it is not subject to backup withholding or
otherwise establish a basis for exemption. Backup withholding is not an additional tax. A U.S. Holder can
claim a credit against its U.S. federal income tax liability for amounts withheld under the backup
withholding rules, and can claim a refund of amounts in excess of its tax liability by timely providing the
appropriate information to the IRS. Prospective investors should consult their tax advisors about qualifying
for an exemption from backup withholding.
Certain U.S. Holders are required to report information with respect to their investment in ordinary shares not
held through an account with a financial institution to the IRS. Investors who fail to report required
information could become subject to substantial penalties. Potential investors are encouraged to consult with
their own tax advisors regarding the possible implications of this legislation on their investment in ordinary
shares.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT
MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS
URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN
INVESTMENT IN THE ORDINARY SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
148
PART 20: UNDERWRITING
A.
GENERAL
Citi and Credit Suisse are acting as Joint Global Coordinators and Joint Bookrunners of the Offering and
as representatives of the underwriters named below. Subject to the terms and conditions stated in the
underwriting agreement dated the date of this prospectus (the ‘‘Underwriting Agreement’’), each
underwriter named below has severally agreed to purchase, and we and the Selling Shareholder have
agreed to sell to that underwriter, the number of ordinary shares set forth opposite the underwriter’s name.
Number of
Offer Shares to
be acquired(1)
Number of
Offer Shares to
be acquired(2)
Number of
Offer Shares to
be acquired(3)
Percentage of
Underwritten
Offer Shares
.
5,376,250
5,088,750
4,861,776
42.5%
.
5,376,250
5,088,750
4,861,775
42.5%
.
632,500
598,677
571,974
5.0%
.
632,500
598,676
571,974
5.0%
.
.
632,500
12,650,000
598,676
11,973,529
571,974
11,439,473
5.0%
100%
Underwriters
Citigroup Global Markets Limited, Canada
Square, London E14 5LB, United
Kingdom. . . . . . . . . . . . . . . . . . . . . . . .
Credit Suisse Securities (Europe) Limited,
One Cabot Square, London E14 4QJ,
United Kingdom . . . . . . . . . . . . . . . . . .
COMMERZBANK Aktiengesellschaft,
Kaiserstraße 16 (Kaiserplatz),
60311 Frankfurt, Germany . . . . . . . . . . .
HSBC Trinkaus & Burkhardt AG,
Koenigsallee 21/22, 40212 Duesseldorf,
Germany . . . . . . . . . . . . . . . . . . . . . . .
UniCredit Bank AG, Arabellastraße 14,
81925 Munich, Germany . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
Assuming purchase by the Underwriters of the maximum number of Existing Shares, full exercise of the Greenshoe Option and
issuance of 5,000,000 New Shares (lower end of the Price Range).
(2)
Assuming the purchase by the Underwriters of the maximum number of Existing Shares, full exercise of the Greenshoe Option
and issuance of 4,411,765 New Shares (mid-point of the Price Range).
(3)
Assuming the purchase by the Underwriters of the maximum number of Existing Shares, full exercise of the Greenshoe Option
and issuance of 3,947,368 New Shares (upper end of the Price Range).
In connection with the Offering, each of the Underwriters and any of their respective affiliates, acting as an
investor for its own account, may take up Offer Shares in the Offering and in that capacity may retain,
purchase or sell for its own account such securities and any Offer Shares or related investments and may
offer or sell such Offer Shares or other investments otherwise than in connection with the Offering.
Accordingly, references in this prospectus to Offer Shares being offered or placed should be read as
including any offering or placement of Offer Shares to any of the Underwriters or any of their respective
affiliates acting in such capacity. None of the Underwriters intend to disclose the extent of any such
investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. In
addition certain of the Underwriters or their affiliates may enter into financing arrangements (including
swaps with investors) in connection with which such Underwriters (or their affiliates) may from time to
time acquire, hold or dispose of Offer Shares.
B.
UNDERWRITING AGREEMENT
In the Underwriting Agreement, the Underwriters agreed to underwrite and purchase the Offer Shares
with a view to offering them to investors in this Offering. The Underwriters agreed to remit to the
Company the Offer Price of the New Shares (less agreed commissions and expenses), at the time the
Company’s shares are delivered, which is expected to be two bank working days after admission to trading.
The Stabilization Manager, acting for the account of the Underwriters, further agreed to borrow up to
1,650,000 Over-Allotment Shares from the Selling Shareholder and to sell such Company’s shares as part
of the Offering.
The obligations of the Underwriters are subject to various conditions, including, among other things,
(i) the absence of a material event, e.g. a material adverse change in or affecting the business, prospects,
management, consolidated financial position, shareholders’ equity, or results of operations of the
Company, or a suspension or material limitation in trading in securities generally on the Frankfurt Stock
149
Exchange (Frankfurter Wertpapierbörse), the London Stock Exchange or the New York Stock Exchange,
(ii) receipt of customary certificates, legal opinions, auditor letters, and (iii) the introduction of the
Company’s shares to trading on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). The
Underwriters have provided and may in the future provide services to the Company in the ordinary course
of business and may extend credit to and have regular business dealings with the Company in their capacity
as financial institutions. For a more detailed description of the interests of the Underwriters in the
Offering, see ‘‘Part 3: The Offering—O. Interests of Parties Participating in the Offering.’’
C.
COMMISSION
The Company will pay the Underwriters an aggregate commission of 2.75 percent of the gross proceeds
from the New Shares sold in the Offering if the gross proceeds from the Offering are equal to or below
A 200.0 million, or 2.25 percent if the gross proceeds are higher than A 200.0 million (the ‘‘Base Fee’’). The
Base Fee may be deducted from the gross proceeds of the Offering before payment to the Company. In
addition to the Base Fee, the Company may, in its absolute and full discretion, pay the Underwriters an
additional discretionary success fee of up to 1.00 percent of the gross proceeds from the New Shares sold
in the Offering. Any discretionary fee will be decided on on the date of pricing the Offering.
In addition, the Selling Shareholder will pay the Underwriters an aggregate commission equal to the
applicable Base Fee (i.e., 2.75 percent or 2.25 percent depending on the gross proceeds from the Offering)
on the gross proceeds from the Existing Shares sold in the Offering (assuming no exercise of the
Greenshoe Option), or of the gross proceeds from the Existing Shares and Over-Allotment Shares sold in
the Offering assuming full exercise of the Over Allotment Option. The Selling Shareholder may, in its
absolute and full discretion pay the Underwriters an additional discretionary success fee of up to
1.00 percent.
No commissions will be paid in relation to the aggregate proceeds from Offer Shares allocated to members
of the Management Board.
D.
GREENSHOE OPTION
AND
SECURITIES LOAN
To cover a potential Over-Allotment, the Selling Shareholder will make available to the Stabilization Agent
up to 1,650,000 additional Company’s shares free of charge through a share loan pursuant to a share
lending agreement. Pursuant to the Underwriting Agreement, the Selling Shareholder will grant the
Underwriters the Greenshoe Option. The Greenshoe Option will terminate 30 calendar days after the first
trading date.
E.
TERMINATION/INDEMNIFICATION
The Underwriting Agreement provides that the Underwriters may, under certain circumstances, terminate
the Underwriting Agreement, including after the Offer Shares have been allotted and listed, up to delivery
and settlement. Under certain conditions, the Underwriters are entitled to terminate the Underwriting
Agreement. These conditions include, among others, material adverse changes in the financial condition or
results of operations of the Company (other than as disclosed in this prospectus) and its subsidiaries,
significant restrictions on stock exchange trading or commercial banking activities, the outbreak or
escalation of hostilities, the declaration of a state of national emergency by the Federal Republic of
Germany, the United Kingdom or the United States of America or other catastrophes or crises involving
Germany, the United Kingdom or the United States and having or expected to have a material adverse
impact on financial markets.
The Company has agreed in the Underwriting Agreement to indemnify the Underwriters against certain
liabilities that may arise in connection with the Offering, including liabilities under applicable securities
laws.
F.
SELLING RESTRICTIONS
Notice to EEA Investors (Outside of Germany and Luxembourg)
In relation to each EEA member state (each a ‘‘Relevant Member State’’) which has implemented the
Directive 2003/71/EC (the ‘‘Prospectus Directive’’), each Underwriter has represented, warranted and
agreed that it has not made and will not make an offer to the public of any Offer Shares in that Relevant
Member State other than the offers contemplated in this prospectus in Germany and Luxembourg once
this prospectus has been approved by the BaFin and published in accordance with the Prospectus
150
Directive, except that it may make an offer to the public in that Relevant Member State of any Offer
Shares at any time under the following exemptions under the Prospectus Directive, if they have been
implemented in that Relevant Member State:
1.
to any qualified investor as defined in the Prospectus Directive;
2.
to fewer than 150 natural or legal persons (other than qualified investors as defined in the
Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior
consent of the Joint Bookrunners for any such offer; or
3.
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of any Offer Shares shall result in a requirement for the publication by the
Company or any Underwriters of a prospectus in that Relevant Member State pursuant to Article 3 of the
Prospectus Directive.
For the purposes of this provision, the expression an ‘‘offer to the public’’ in relation to any Offer Shares in
any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and any Offer Shares, as the same may be varied in that member
state by any measure implementing the Prospectus Directive in that member state, and the expression
‘‘Prospectus Directive’’ includes any relevant implementing measure in each Relevant Member State. To
the extent a Relevant Member State has implemented Directive 2010/73/EC of the European Parliament
and the Council amending the Prospectus Directive (the ‘‘Amended Prospectus Directive’’), any reference
herein to the Prospectus Directive shall be read as a reference to the Amended Prospectus Directive.
Notice to United Kingdom Investors
Each of the Underwriters or any of its affiliates or any person acting on its or their behalf has represented,
warranted and agreed that it (i) has only communicated or caused to be communicated, and will only
communicate or cause to be communicated, any invitation or inducement to engage in investment activity
within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the
‘‘FSMA’’), received by it in connection with the issue or sale of any Offer Shares which are the subject of
the Offering contemplated by this prospectus in circumstances in which Section 21(1) of the FSMA does
not apply to the Company; and (ii) has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Offer Shares in, from or otherwise involving
the United Kingdom.
151
PART 21: GLOSSARY OF CERTAIN TERMS AND ABBREVIATIONS
In this prospectus, unless otherwise indicated:
•
‘‘Adjusted’’ as used in relation to the performance measures Adjusted Sales, Adjusted EBITDA,
Adjusted Net Cash Flow and Adjusted Capital Expenditures refers to illustrative aggregated
adjustments that have not been prepared in accordance with IFRS or any generally accepted
accounting principles and that take SSW into consideration without being indicative of consolidation
in accordance with IFRS, and do not refer to pro forma financial information or consolidated
financial information that would be comparable to the Company’s financial information prepared in
accordance with IFRS;
•
‘‘BaFin’’ refers to the German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht);
•
‘‘CAGR’’ refers to compound annual growth rate;
•
‘‘CEST’’ refers to Central European Summer Time;
•
‘‘CISA’’ refers to the Swiss Federal Act on Collective Investment Schemes;
•
‘‘CLE’’ refers to the cut, lapped, and etched finishing of a semiconductor silicon wafer;
•
‘‘CMOS’’ means complementary metal—oxide—semiconductor and is a technology for constructing
integrated circuits;
•
‘‘CSSF’’ refers to the Luxembourg Commission for the Supervision of the Financial Sector
(Commission de Surveillance du Secteur Financier);
•
‘‘CZ’’ refers to the Czochralski crystal growth process used for the manufacture of our polished
semiconductor silicon wafers;
•
‘‘D&O’’ refers to directors and officers;
•
‘‘DECISIF’’ stands for device and circuit performance boosted through silicon material fabrication
and relates to a collaborative research and development project for strained silicon;
•
‘‘DEQ’’ refers to the Oregon Department of Environmental Quality;
•
‘‘DRAM’’ means dynamic random-access memory, and is a type of random-access memory that stores
each bit of data in a separate capacitor within an integrated circuit;
•
‘‘EEA’’ refers to the European Economic Area;
•
‘‘EPA’’ refers to the U.S. Environmental Protection Agency;
•
‘‘FSMA’’ refers to the Financial Services and Markets Act 2000, as amended;
•
‘‘FZ’’ refers to the float zone crystal growing technology used for silicon wafers up to 200 mm for
wafers with extremely stable resistivity performance and high voltage capabilities;
•
‘‘GAAP’’ refers to generally accepted accounting principles for a given jurisdiction;
•
‘‘GaN-on-Si’’ refers to gallium-nitride-on-silicon, a process used for the manufacture of silicon wafers
for use in power applications, mobile devices and opto-electronics (primarily light emitting diodes
(LEDs));
•
‘‘Gartner’’ refers to Gartner, Inc., an information technology research and advisory firm;
•
‘‘IASB’’ refers to the International Accounting Standards Board;
•
‘‘IFRS’’ refers to the International Financial Reporting Standards as issued by the IASB and as
adopted by the European Union;
•
‘‘IRS’’ refers to the U.S. Internal Revenue Service;
•
‘‘JPY’’ or ‘‘Japanese Yen’’ refers to the lawful currency of Japan;
•
‘‘KPMG’’ refers to KPMG AG Wirtschaftsprüfungsgesellschaft, Ganghoferstr. 29, 80339 Munich,
Germany;
•
‘‘MGP’’ refers to a manufactured gas plant;
G-1
•
‘‘NOAA’’ refers to the U.S. National Oceanic and Atmospheric Administration;
•
‘‘NWT’’ refers to the Luxembourg net wealth tax (impôt sur la fortune), which is a percentage of net
wealth, referred to as a unitary value (valeur unitaire), as determined at January 1 of each year;
•
‘‘PFIC’’ refers to a passive foreign investment company under U.S. law;
•
‘‘PLTA’’ refers to a domination and profit and loss transfer agreement;
•
‘‘R&D’’ means research and development;
•
‘‘PRPs’’ refer to potentially responsible parties so designated by the EPA regarding an environmental
contamination at a site;
•
‘‘QIBs’’ refers to qualified institutional buyers as defined in Rule 144A under the United States
Securities Act of 1933, as amended;
•
‘‘SEMI’’ refers to the SEMI Silicon Manufacturers Group;
•
‘‘SGD,’’ ‘‘Singaporean Dollar’’ and ‘‘SG$’’ refer to the lawful currency of Singapore;
•
‘‘SSW’’ refers to Siltronic Silicon Wafer Pte. Ltd.;
•
‘‘StromNEV’’ refers to the
(Stromnetzentgeltverordnung);
•
‘‘TCE’’ refers to trichloroethylene, a contaminant that was formerly used by our subsidiary at the
Portland Property; and
•
‘‘USD,’’ ‘‘U.S. Dollar’’ and ‘‘US$’’ refer to the lawful currency of the United States of America.
German
Electricity
G-2
Grid
Access
Charge
Ordinance
PART 22: INDEX TO FINANCIAL STATEMENTS
Page
Unaudited Interim Consolidated Financial Statements of Siltronic AG Prepared in Accordance
with IFRS on Interim Financial Reporting as of and for the Three-Month Period ended
March 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Profit or Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audited Consolidated Financial Statements of Siltronic AG Prepared in Accordance with IFRS
as of and for the Fiscal Years ended December 31, 2014, 2013 and 2012 . . . . . . . . . . . . . . . .
Consolidated Statements of Profit or Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audited Unconsolidated Financial Statements of Siltronic AG Prepared in Accordance with the
German Commercial Code (Handelsgesetzbuch) as of and for the Fiscal Year ended
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Siltronic Silicon Wafer Pte Ltd (Formerly Known as Siltronic Samsung Wafer Pte Ltd) IFRS
Financial Statements—December 31, 2013 and December 31, 2012 . . . . . . . . . . . . . . . . . . . .
Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-17
F-18
F-19
F-20
F-21
F-22
F-24
F-70
F-71
F-72
F-73
F-74
F-86
F-87
F-88
F-89
F-90
F-91
F-92
F-121
Siltronic AG and Subsidiaries
Interim Report for Q1 2015
F-2
Siltronic AG and subsidiaries:
Consolidated Statements of Profit or Loss
In EUR millions
For the 3 months
ended March 31,
2015
2014
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.7
196.4
(199.1) (187.3)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39.6
9.1
(8.5)
(16.2)
(4.2)
56.1
(58.5)
(7.5)
(15.9)
(4.2)
30.1
(9.0)
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3
2.6
Loss from investment in joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(3.5)
8.3
(0.9)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(0.6)
(1.5)
0.6
(0.8)
(0.7)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.1)
(0.9)
Profit / (loss) before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2
(1.8)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4.3)
(1.2)
Net profit / (loss) for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9
(3.0)
Of which
attributable to Siltronic AG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
attributable to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2
(1.3)
(0.7)
(2.3)
Result per common share in Euro (basic / diluted) . . . . . . . . . . . . . . . . . . . . . . . . . .
0.06
(0.01)
Other operating income . . . . . . . . . .
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F-3
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.
As of
March 31,
2015
In EUR millions
Intangible assets . . . . . . . . . . .
Property, plant and equipment .
Financial assets . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . .
Income tax receivables . . . . . .
Deferred tax assets . . . . . . . . .
.
.
.
.
.
.
30.0
573.6
—
—
0.2
7.8
29.7
571.7
—
0.3
0.2
7.1
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611.6
609.0
Inventories . . . . . . . . . . .
Trade receivables . . . . . .
Financial receivables . . . .
Other assets . . . . . . . . . .
Income tax receivables . .
Cash and cash equivalents
.
.
.
.
.
.
144.3
122.9
—
26.0
1.1
197.6
138.4
111.1
—
23.2
1.4
187.4
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
491.9
461.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,103.5
1,070.5
Subscribed capital . .
Capital reserves . . .
Accumulated deficit
Other equity items .
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F-4
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1,070.5
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1,103.5
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Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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758.7
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906.0
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Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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317.5
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357.7
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Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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8.0
4.0
55.8
176.1
73.6
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8.7
5.5
69.2
142.3
132.0
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Other provisions . . . . . . .
Provisions for income tax .
Trade liabilities . . . . . . . .
Financial liabilities . . . . .
Other liabilities . . . . . . . .
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441.2
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548.3
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Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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328.1
26.2
0.1
1.7
35.8
49.3
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428.5
27.1
0.1
3.0
39.2
50.4
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Provision for pensions . . .
Other provisions . . . . . . .
Provisions for income tax .
Deferred tax liabilities . . .
Other liabilities . . . . . . . .
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311.8
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197.5
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Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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309.1
2.7
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195.9
1.6
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Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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100.0
946.8
(548.4)
(189.3)
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100.0
946.8
(545.2)
(305.7)
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As of
December 31,
2014
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Consolidated Statement of Cash Flows
For the
3 months ended
March 31,
2015
2014
In EUR millions
Net profit / (loss) for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation, amortization and impairments/write-ups of non-current assets .
Other non-cash expenses and income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Result from disposal of non-current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Result from investment in joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9
31.8
14.2
0.6
—
0.5
0.2
(12.2)
1.2
6.0
3.9
1.6
(1.6)
(0.4)
—
(3.0)
32.4
(16.4)
—
3.5
(4.8)
12.1
(3.8)
0.3
1.6
12.0
55.7
(1.5)
(1.0)
0.1
Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47.7
87.2
Investment in intangible assets, property, plant and equipment . . . . . . . . . . . . . . . . . .
Proceeds from the disposal of intangible assets, property, plant and equipment . . . . . .
Acquisition of subsidiary, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8.1)
—
—
(8.3)
0.2
26.2
Cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8.1)
18.1
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank loans repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities raised . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from payments due to profit and loss transfer agreement
Utilization of / (increase in) funds in cash pooling . . . . . . . . . . . .
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— (269.5)
— (197.3)
0.3
—
—
100.5
(33.8) 288.3
Cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(33.5)
(78.0)
Changes due to exchange-rate fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
0.1
Changes in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2
187.4
27.4
12.5
At the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
197.6
39.9
F-5
Consolidated Statements of Comprehensive Income
before
taxes
In EUR millions
Net profit / (loss) for the period . . . . . . . . . . . . . . .
Items that will never be reclassified to profit or loss
Remeasurement of defined benefit plans . . . . . . .
Sum of items that will never be reclassified to profit
or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Items that are or may be reclassified to profit or
loss
Difference from foreign currency translation
adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
thereof recognized in profit or loss . . . . . . . . . . . .
Changes in market values of the securities
available for sale . . . . . . . . . . . . . . . . . . . . . .
Changes in market values of derivative financial
instruments (cash flow hedge) . . . . . . . . . . . .
thereof recognized in profit or loss . . . . . . . . . .
Effects of net investment in a foreign operation .
Share of cash flow hedge in joint venture . . . . .
Sum of items that are or may be reclassified
profit or loss . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss / income reported
period . . . . . . . . . . . . . . . . . . . . . . . . . .
For the 3 months ended March 31,
deferred
before
deferred
taxes
2015
taxes
taxes
(3.0)
—
(3.0)
—
(91.2) (31.1)
—
(31.1)
(91.2)
—
(91.2) (31.1)
—
(31.1)
.
.
10.5
—
—
—
10.5
—
—
—
(16.8)
(17.6)
.
(0.6)
—
(0.6)
—
—
—
.
.
.
.
.
.
(34.9)
11.4
—
—
—
—
—
—
—
—
—
—
(34.9)
11.4
—
—
—
—
(2.3)
(2.2)
2.6
2.1
0.1
0.1
—
—
—
—
—
—
(2.3)
(2.2)
2.6
2.1
0.1
0.1
(25.0)
—
(25.0) (16.4)
—
(16.4)
(116.2)
—
(116.2) (47.5)
—
(47.5)
to
......
in the
......
1.9
—
(91.2)
1.9
2014
(16.8)
(17.6)
Total comprehensive loss/income reported in the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(114.3)
(50.5)
Of which
attributable to Siltronic AG shareholders . . . . . . .
attributable to non-controlling interests . . . . . . . .
(113.2)
(1.1)
(48.3)
(2.2)
F-6
Consolidated Statement of Changes in Equity
Difference
Changes
from
Effects
in market
foreign
of net
values of
currency
investments securities
Subscribed Capital translation in foreign available
capital
reserves adjustments operations
for sale
In EUR millions
Changes
in market
values of
derivative
financial Remeasurement
instruments
of defined
(cash flow
benefit
Accumulated
hedge)
plans
deficit
Total
Minority Total
interest equity
F-7
Balance as of January 1, 2014 . . . . . . . . . . . . . . . . . . . . .
Net loss for the period . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . .
100.0
—
—
970.3
—
—
(1.7)
—
(16.9)
(2.6)
—
2.6
0.1
—
—
12.3
—
(2.2)
(25.3)
—
(31.1)
(262.9)
(0.7)
—
790.2
(0.7)
(47.6)
—
(2.3)
0.1
790.2
(3.0)
(47.5)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . .
Transactions with owners of the Company
Capital increase due to profit and loss transfer agreement .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(16.9)
2.6
—
(2.2)
(31.1)
(0.7)
(48.3)
(2.2)
(50.5)
—
—
15.6
—
—
—
—
—
—
—
—
—
—
—
—
(269.5)
15.6
(269.5)
—
—
15.6
(269.5)
Total contributions and distributions . . . . . . . . . . . . . . . .
Acquisition of subsidiary with NCI . . . . . . . . . . . . . . . . .
—
—
15.6
—
—
—
—
—
—
—
—
—
—
—
(269.5)
—
(253.9)
—
—
13.1
(253.9)
13.1
Total changes in ownership interests . . . . . . . . . . . . . . . .
—
—
.
.
.
.
.
.
.
.
.
.
—
100.0
100.0
—
—
15.6
985.9
946.8
—
—
—
—
—
(18.6)
(7.4)
—
10.3
—
—
—
—
—
—
0.1
—
—
(0.6)
—
10.1
(21.1)
—
(34.9)
—
(56.4)
(160.8)
—
(91.2)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . .
Capital increase due to profit and loss transfer agreement
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reduction due to transaction with shareholder . . .
.
—
—
10.3
—
(0.6)
(34.9)
(91.2)
.
.
.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total contributions and distributions . . . . . . . . . . . . . . . .
Acquisition of subsidiary with NCI . . . . . . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total changes in ownership interests . . . . . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
Total transactions with owners of the company . . . . . . . . .
Balance as of March 31, 2015 . . . . . . . . . . . . . . . . . . . . .
—
100.0
—
946.8
—
2.9
—
—
—
(0.6)
—
195.9
—
1.6
—
197.5
Total transactions with owners of the
Balance as of March 31, 2014 . . . . .
Balance as of January 1, 2015 . . . . .
Net profit for the period . . . . . . . .
Other comprehensive income . . . . .
company
.......
.......
.......
.......
.
.
.
.
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.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
—
—
—
(56.0)
—
—
(252.0)
—
(269.5)
(533.1)
(548.4)
3.2
—
3.2
—
(545.2)
13.1
13.1
(253.9)
488.0
309.1
3.2
(116.4)
—
13.1
10.9
2.7
(1.3)
0.2
(240.8)
498.9
311.8
1.9
(116.2)
(113.2)
(1.1)
(114.3)
Notes to the Interim Consolidated Financial Statements of Siltronic AG and subsidiaries
01
Reporting entity
Siltronic AG (the Company) is a company domiciled in Munich/Germany, Hanns-Seidel-Platz 4 and is
registered at the Munich District Court (Amtsgericht) under HRB 150884.
These condensed consolidated financial statements (‘‘interim financial statements’’) as at and for the three
month period ended March 31, 2015 comprise the Company and its subsidiaries, together referred to as
the ‘‘Group’’.
The Group develops and manufactures silicon wafers with diameters of up to 300 mm and operates wafer
facilities in each of Burghausen and Freiberg, Germany, two wafer facilities in Singapore, and one wafer
facility in Portland, Oregon.
02
Basis of accounting
The interim financial statements of Siltronic as of March 31, 2015 have been prepared in accordance with
the rules of the International Financial Reporting Standards (IFRS) for interim financial reporting
(IAS 34) as endorsed by the EU. These statements do not include all the information required for a
complete set of IFRS financial statements. However, selected explanatory notes are included to explain
events and transactions that are significant to an understanding of the changes in the Groups financial
positions and performance since the last annual consolidated financial statements as at and for the year
ended December 31, 2014.
The same accounting policies and methods of computation are followed in the interim financial statements
as compared with the most recent annual financial statements.
New accounting standards were introduced in 2015, but they had no substantial impact on Siltronic’s
accounting or valuation methods.
03
Use of judgments and estimates
When the interim financial statements are being prepared, it is necessary to make judgments, estimates
and assumptions affecting the amounts and the reporting of the recognized assets and debts, income and
expenses, and contingent liabilities. All assumptions and estimates are based on projections that were valid
on the reporting date. The actual values may differ from assumptions and estimates if the economic
conditions referred to do not develop in line with the expectations as of the reporting date.
The significant judgments made by management in applying the Group’s accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the consolidated financial
statements as at and for the year ended December 31, 2014.
Further information about assumptions in measuring fair values and with respect to determining employee
benefits are included in the respective notes.
04
New accounting standards
The following standards and interpretations of the IASB were applied for the first time in the first three
months of 2015:
•
IFRIC 21 ‘‘Levies’’, mandatory application from January 1, 2015
This IFRIC contains rules for the recognition of obligations to pay public levies that are not defined as
taxes within the meaning of IAS 12 „Income Taxes‘‘. It has no impact on Siltronic’ earnings, net assets
or financial position, or on the presentation of its financial statements.
•
Improvements to IFRS 2011-2013, mandatory application from July 1, 2014
Improvements refer to the standards IFRS 1, IFRS 3, IFRS 13 and IAS 40. The changes have no
material impact on Siltronic’s earnings, net assets or financial position, or on the presentation of its
financial statements.
F-8
05
Standards and Interpretations not yet adopted
The following standards were approved by the IASB between 2009 and 2014, but their application is not
yet mandatory for the period under review.
•
Amendments to IAS 19 „Defined Benefit Plans: Employee Contributions‘‘, mandatory application
from July 1, 2014 The amendments clarify those regulations that concern the allocation of
contributions by employees or third parties to service periods in cases where the contributions are
linked to the same period of service. In addition, relief is granted in cases where the contributions are
independent of the number of years of service. The amendments have no impact on Siltronic’s
earnings, net assets or financial position, or on the presentation of its financial statements.
•
Improvements to IFRS 2010-2012, mandatory application from February 1, 2015. Improvements refer
to the standards IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38. The changes have no
material impact on Siltronic’ earnings, net assets or financial position, or on the presentation of its
•
IFRS 9 „Financial Instruments‘‘, mandatory application from January 1, 2018
In addition to the recognition and measurement of financial assets, the updated version of IFRS 9
contains new stipulations for accounting impairments of financial assets and revised requirements for
the classification and measurement of financial instruments as part of hedge accounting. In the future,
financial assets will be measured either at amortized cost or at fair value, depending on the business
model of the company in question. The classification model for financial liabilities will be retained.
The recognition of impairments will change fundamentally since credit losses will no longer be
recognized when actually incurred, but as soon as they are expected to be incurred. The goal of the
new hedge accounting model under IFRS 9 is to better reflect risk management activities in the
financial statements. Cash flow hedge accounting, fair value hedge accounting and hedging of a net
investment in a foreign operation remain admissible hedging relationships. In each case, the number
of qualifying underlying and hedging transactions was extended. At the moment, Siltronic cannot
conclusively assess what impacts the first-time application of this standard will have on its earnings,
net assets or financial position, or on the presentation of its financial statements.
•
IFRS 14 „Regulatory Deferral Accounts‘‘, mandatory application from January 1, 2016
This standard allows entities preparing IFRS statements for the first time in accordance with IFRS 1
‘‘First-Time Adoption of the International Financial Reporting Standards’’ to include in these
statements so-called regulatory deferral accounts recognized under current national accounting
standards for rate-regulated activities, and to allow the entities to continue to prepare their financial
statements according to previously applicable accounting methods. The amendments have no impact
on Siltronic’s earnings, net assets or financial position, or on the presentation of its financial
statements since Siltronic is not a first time adopter in accordance with IFRS 1.
•
IFRS 15 „Revenue from Contracts with Customers‘‘, mandatory application from January 1, 2018
IFRS 15 sets out that an entity shall recognize revenue whenever the customer obtains control of, and
can draw an economic benefit from, the promised goods and services. The transfer of significant risks
and rewards of ownership is no longer of primary importance, as was still the case under the old
IAS 18 „Revenue’’ rules. Revenue shall be recognized in an amount that reflects the consideration to
which an entity expects to be entitled. The new model provides a five-step framework for recognizing
revenue, which first identifies the contract with a customer and the performance obligations it entails,
and then determines and allocates the transaction price. The revenue shall be recognized for each
individual performance obligation when the customer obtains control of the good or service. Siltronic
is currently evaluating the new standard to determine its impact on the recognition of revenue. At the
moment, Siltronic cannot conclusively assess what impacts the first-time application of this standard
will have on its earnings, net assets or financial position, or on the presentation of its financial
statements. The new standard will result in broader disclosure details in Siltronic’s financial
statements.
•
Amendments to IFRS 11 „Accounting for Acquisitions of Interests in Joint Operations‘‘, mandatory
application from January 1, 2016
This amendment clarifies that the acquisition and accumulation of interests in joint operations that
represent a business (as defined by IFRS 3 ‘‘Business Combinations’’) should be recognized by
F-9
applying the accounting principles for business combinations in IFRS 3 and other applicable IFRSs,
unless these conflict with IFRS 11. This clarification currently has no impact on Siltronic’s earnings,
•
Amendments to IAS 16 and IAS 38 „Clarification of Acceptable Methods of Depreciation and
Amortization‘‘, mandatory application from January 1, 2016
The amendment clarifies that the use of revenue based methods to calculate the depreciation of an
asset is not appropriate since depreciation does not reflect consumption of the expected future
economic benefits embodied in the asset. This also applies to intangible assets with a limited useful
life. The presumption here, however, can be rebutted. The amendment also clarifies that a decline in
sales prices of the goods produced can serve as an indicator of the commercial obsolescence of
property, plant and equipment. Siltronic uses only straight-line depreciation over the expected useful
life of such assets. Thus, the clarification has no impact on Siltronic’s earnings, net assets or financial
position, or on the presentation of its financial statements.
•
Amendments to IAS 16 and IAS 41 „Financial Reporting for Bearer Plants‘‘, mandatory application
from January 1, 2016
IAS 41 currently requires all biological assets related to agricultural activity to be measured at fair
value less estimated costs to sell. According to the amendments, bearer plants are henceforth to be
accounted for in the same way as property, plant and equipment in IAS 16 because they are utilized in
a similar way. However, the produce growing on bearer plants will remain within the scope of IAS 41.
In the absence of relevant circumstances, the amendment has no impact on Siltronic’s earnings, net
assets or financial position, or on the presentation of its financial statements.
•
Amendments to IAS 27 „Separate Financial Statements (Equity Method)‘‘, mandatory application
from January 1, 2016
In the future, this revision of IAS 27 will allow an entity to apply the equity method to account for
investments in subsidiaries, joint ventures and associates in its separate IFRS financial statements.
Application of the revised standard has no impact on Siltronic since it does not compile separate
financial statements in accordance with IFRS.
•
Amendments to IFRS 10 and IAS 28 „Sale of Contribution of Assets between an Investor and its
Associate or Joint Venture ‘‘, mandatory application from January 1, 2016 (under revision)
In accordance with these two revised standards, the investor’s gain or loss must always be recognized
in full if a transaction constitutes a business as defined in IFRS 3. If this is not the case and the
transaction concerns assets that do not constitute a business, the gain or loss is recognized only to the
extent of unrelated investors’ interests in the associate or joint venture. Their application currently has
no impact on Siltronic’s earnings, net assets or financial position.
•
Improvements to IFRS 2012-2014, mandatory application from January 1, 2016
The amendments affect IFRS 5, IFRS 7, IAS 19 and IAS 34. Their application has no substantial
impact on Siltronic’s earnings, net assets or financial position.
•
Amendments to IAS 1, mandatory application from January 1, 2016
The amendments to IAS 1 Presentation of Financial Statements clarify, rather than significantly
change, existing IAS 1 requirements. In most cases the proposed amendments respond to overly
prescriptive interpretations of the wording in IAS 1.
•
Amendments to IFRS 10, IFRS 12 and IAS 28 „Investment Entities: Applying the Consolidated
Exception‘‘, mandatory application from January 1, 2016
The amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in
Other Entities and IAS 28 Investments in Associates and Joint Ventures introduce clarifications to the
requirements when accounting for investment entities. The amendments also provide relief in
particular circumstances, which will reduce the costs of applying the Standards.
06
Financial performance during the period and major events
Sales increased in Q1 2015 compared to Q1 2014 by 22 percent. This increase was (i) partly due to the fact
that SSW was consolidated for the entire three months of Q1 2015 whereas in Q1 2014, SSW was first
F-10
consolidated on January 24th, (ii) partly because of a larger wafer area (volume) sold independent from
the consolidation of SSW and (iii) partly because of increased prices after conversion to Euro due to a
stronger U.S. Dollar in the first three months of 2015 compared to the first three months of 2014.
Cost of goods sold increased by 6 percent only despite the strong increase in volume. Apart from larger
sales volumes, cost of goods sold increased due to higher costs for depreciation and amortization of
property, plant and equipment related to the consolidation of SSW.
Total expenses for selling, research and development and general administration increased from
EUR 27.6 million in Q1 2014 by EUR 1.3 million to EUR 28.9 million in Q1 2015. The increase was
predominantly caused by higher sales volumes. In percentage of sales, total expenses for selling, research
and development and general administration went down from 14.1 percent in Q1 2014 to 12.1 percent in
Q1 2015.
Other operating income of Q1 2015 includes profits resulting from currency exchange rates (including
hedging activities) of EUR 54.4 million. Other operating losses of Q1 2015 comprise losses from currency
exchange rates (including hedging activities) of EUR 56.5 million.
In Q1 2014, EUR 25.1 million have been recorded as profits from currency exchange rates (including
hedging activities) in other operating income out of which EUR 17.6 million relate to the first-time
consolidation of SSW. In addition, other operating income of the first three months of 2014 includes a gain
of EUR 3.5 million resulting from the re-assessment of the previously held interest in SSW to its fair value.
Other operating expenses coming from currency exchange rates (including hedging activities) amounted to
EUR 8.6 million in Q1 2014.
As of March 31, 2015, trade receivables went up compared to December 31, 2014 due to the appreciation
of the US Dollar against the Euro. The increase in inventory is triggered by high demand.
When comparing the liabilities as of March 31, 2015 with the corresponding amounts as of December 31,
2014, the following major changes occurred: (i) The provision for pensions went up due to a reduction in
discount rate; reference is made to note 10. (ii) The increase in trade liabilities is partly related to the
balance sheet date and partly because of the devaluation of the Euro. (iii) Financial liabilities decreased
because of the free cash flow in Q1 2015. (iv) Derivative financial instruments caused the other current
liabilities to rise. The liabilities from derivative financial instruments increased from EUR 33.5 million as
of December 31, 2014 to EUR 90.0 million as of March 31, 2015 because of the appreciation of the US
Dollar and the Singapore Dollar; reference is made to note 09.
Seasonality had no significant impact on the financial performance.
Since January 1, 2015, Siltronic AG is no longer part of the fiscal unity with Wacker Chemie AG because
the profit and loss transfer agreement was canceled as of that date.
07
Segment reporting
The Group is engaged in one reportable segment that includes the development, production and
marketing of semiconductor wafers with a wide variety of features satisfying numerous product
specifications to meet customers’ precise technical specifications, which are utilized in the manufacture of
semiconductor devices. Based on the fact that in the wafer industry the allocation of resources is derived
from a wide variety of specifications the Group is operating in one segment.
F-11
The geographical information during the reporting periods was as follows:
In EUR millions
As of March 31, 2015:
External sales by customer
location . . . . . . . . . . . . . . . .
Additions to property, plant and
equipment and intangible
assets . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . .
As of March 31, 2014:
External sales by customer
location . . . . . . . . . . . . . . . .
equipment and intangible
assets . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . .
Israel and
Asia
Europe
excluding
excluding United
Taiwan and
Siltronic
Germany Germany States Taiwan Japan
Japan
Consolidation Group
12.1
27.6
37.2
52.3
16.1
93.4
—
238.7
3.2
219.4
—
—
0.7
10.0
—
—
—
0.1
0.4
357.5
—
16.6
4.3
603.6
13.4
23.5
26.0
51.0
17.2
65.3
—
196.4
5.7
257.7
—
—
0.2
8.5
—
—
—
4.7
0.9
368.1
—
17.2
6.8
656.2
Sales in the region Asia excluding Taiwan and Japan primarily relate to South Korea, Malaysia, China and
Singapore.
08
Property, plant and equipment
During the three months ended March 31, 2015, the Group had additions to property, plant and
equipment amounting to EUR 4.3 million (Q1 2014: EUR 6.8 million). The additions relate to machinery
and equipment.
The disposals of property, plant and equipment have been EUR 1.5 million in the first quarter of 2015
(Q1 2014: EUR 2.8 million).
09
Information on fair values
The fair value of a financial instrument is the price that would be achieved in the sale of an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
The following tables show financial assets and liabilities by measurement categories and classes as of
March 31, 2015 and December 31, 2014, respectively. Also presented are liabilities from derivatives for
which hedge accounting is used, even though they do not belong to any of the IAS 39 measurement
categories.
The fair value of financial instruments measured at amortized cost is determined based on discounting,
taking into account customary market interest rates that are adequate to the specific risk and correspond
to the relevant maturity. The carrying amount of current balance-sheet items approximate fair value. The
categories in accordance with IAS 39 differ between assets and liabilities measured at amortized costs and
those measured at fair value as shown in the table below. These categories are sufficient to reflect the
classes in accordance with IFRS 7 which distinguish at minimum financial instruments measured at
amortized cost from financial instruments measured at fair value. Those financial instruments which show
F-12
specific risks are derivative financial instruments only pertaining to foreign currency derivatives, which are
presented separately in the table below.
As of
March 31, 2015
Carrying
amount
Fair value
In EUR millions
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
As of
December 31, 2014
Carrying
amount
Fair value
122.9
122.9
111.1
111.1
Other financial assets . . . . . . . .
Loans and receivables . . . . . . .
Derivative financial instruments
Cash and cash equivalents . . . . . .
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16.7
—
—
197.6
16.7
15.6
1.1
197.6
20.5
—
—
187.4
20.5
16.3
4.2
187.4
Loans . . . . . . . . . . . . . . . . . . . .
Trade liabilities . . . . . . . . . . . . . .
Other financial liabilities(2) . . . . .
Recognized at amortized cost . .
Derivative financial instruments
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181.5
69.2
114.3
—
—
181.5
69.2
114.3
24.3
90.0
211.9
55.8
52.8
—
—
211.9
55.8
52.8
19.4
33.4
(1)
Does not include tax receivables, advance payments made or accruals and deferrals
(2)
Includes other liabilities shown in the statement of financial position with the exception of advance payments received, accruals
and deferrals, and tax liabilities
The financial assets and liabilities measured at fair value in the balance sheet were allocated to one of
three categories in accordance with the fair value hierarchy described in IFRS 13. Allocation to these
categories reveals which of the fair values reported were settled through market transactions and the
extent to which the measurement was based on models in the absence of observable market transactions.
The levels of the hierarchy are as follows:
Level I:
Financial instruments measured using quoted prices in active markets (markets showing
appropriate liquidity) which are representative to the financial instrument being measured.
Level II: Financial instruments measured using valuation methods based on observable market data, the
fair value of which can be determined using similar financial instruments traded in active
markets or using valuation methods all of whose parameters are observable. These include
hedging and non-hedging derivative financial instruments and loans.
Level III: Financial instruments measured using valuation methods not based on observable parameters,
the fair value of which cannot be determined using observable market data and which require
application of different valuation methods (typically applied for over-the-counter derivatives
and unquoted equity instruments).
F-13
The following table shows the fair-value-hierarchy classification of financial assets and liabilities measured
at fair value:
In EUR millions
Level I
Fair value hierarchy
March 31, 2015
Level II
Level III
Total
Level I
Financial assets measured at fair
value
Fair value through profit or loss
Derivatives, hedge accounting is
not applied (held for trading) . .
Fair value through other
comprehensive income
applied . . . . . . . . . . . . . . . . . .
—
—
—
—
—
Total . . . . . . . . . . . . . . . . . . . . . .
—
1.1
—
1.1
—
Financial liabilities measured at fair
value
not applied (held for trading) . .
Fair value through other
comprehensive income
applied . . . . . . . . . . . . . . . . . .
—
33.9
—
33.9
—
—
56.1
—
56.1
Total . . . . . . . . . . . . . . . . . . . . . .
—
90.0
—
90.0
Financial liabilities recognized at
amortized cost: . . . . . . . . . . . . . .
—
181.5
—
181.5
—
1.1
—
1.1
—
December 31, 2014
Level II
Level III
1.4
Total
—
1.4
2.8
—
2.8
4.2
—
4.2
9.4
—
9.4
—
24.0
—
24.0
—
33.4
—
33.4
—
211.9
—
211.9
The Group regularly reviews whether its financial instruments are appropriately allocated to the hierarchy
levels. No changes to the valuation method occurred compared with the year presented and no
non-recurring fair value measurements were carried out. No reclassifications between the levels of the fair
value hierarchy were carried out in the period under review.
Market values are calculated using information available on the reporting date and based on counterparties’ quoted prices or via appropriate valuation methods (discounted cash-flow or well-established
actuarial methodologies, such as the par method).
Derivative financial instruments are recognized at fair value and are thus subject to a recurring fair-value
assessment. They are categorized as Level 2 fair values.
The fair value of a derivative financial instrument is calculated based on market data such as exchange
rates or yield curves in accordance with market-specific valuation methods. The calculation of the fair
value reflects our and the counterparty’s default risk, using maturity-matching and market-observable CDS
values.
10
Provision for pensions
Due to the significant fluctuations of the discount rates used to determine the provision for pensions, the
Group reassessed these as of balance sheet date. The actuarial calculation as of March 31, 2015 has been
based on discount factors of 1.65 percent in Germany and 3.61 percent in the USA (as of March 31, 2014:
3.50 percent in Germany and 4.34 percent in the USA). As of December 31, 2014, the discount rates were
2.3 percent in Germany and 3.80 percent in the USA respectively.
The change of discount rates had an effect of EUR 91.2 million for the three months period ended
March 31, 2015 (Q1 2014: EUR 31.1 million) and has been presented as other comprehensive loss.
F-14
The effect of EUR 91.2 million is mainly related to pensions in Germany. The following table shows the
present value of the defined benefit obligations and the plan assets in Germany as of March 31, 2015 and
December 31, 2014.
As of March 31, 2015
(in E millions)
Germany Foreign
Total
Present value of funded defined benefit
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
(in E millions)
Germany Foreign
Total
576.2
357.5
142.4
94.0
718.6
451.5
498.4
350.3
121.6
83.5
620.0
433.8
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . .
obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .
218.7
48.4
267.1
148.1
38.1
186.2
155.2
6.2
161.4
136.5
5.4
141.9
Provisions for pensions and similar obligations . . .
373.9
54.6
428.5
284.6
43.5
328.1
11
Related party disclosures
The disclosure requirements according to IAS 24 refer to transactions (i) with its controlling parent
Wacker Chemie AG and the ultimate controlling shareholder of Wacker Chemie AG which is
Dr. Alexander Wacker Familiengesellschaft mbH (holding more than 50 percent of the voting shares in
Wacker Chemie AG), (ii) with SSW before consolidation, (iii) between SSW and Samsung, the
noncontrolling shareholder of SSW (after consolidation), (iv) with Wacker Pensionskasse and (v) with
members of the Management Board and Supervisory Board of the Company.
The amounts recorded in the statement of profit or loss resulting from transactions with related parties
For the
3 months
ended
March, 31
2015
2014
in EUR millions
Sales . . . . . . . . . .
Cost for goods sold
Interest expense . .
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37.4
50.3
0.0
0.3
24.1
48.4
0.6
0.2
Sales with related parties include sales with Samsung of EUR 35.9 million in Q1 2015 (Q1 2014:
EUR 22.3 million). Interest expense of EUR 0.3 million is due to Samsung in Q1 2015 (Q1 2014:
EUR 0.2 million).
The following table shows inventories, receivables from and liabilities to related parties recorded in the
statement of financial position for the periods ended March 31, 2015 and 2014 and December 31, 2014:
In EUR millions
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which Wacker Chemie . . . . . . . . . . . . . . . . . . .
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . .
of which Samsung . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which advance payment to Wacker Pensionskasse
Financial liability from Wacker Chemie AG . . . . . .
Financial liability from Samsung . . . . . . . . . . . . . .
Trade liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which prepayment from Samsung . . . . . . . . . . .
12
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March 31,
2015
December 31,
2014
10.4
10.4
7.6
7.6
7.3
7.3
142.3
39.2
19.0
19.0
53.9
53.9
12.3
12.3
10.6
10.6
9.8
9.5
176.0
35.8
9.6
9.6
54.1
54.1
Taxes
Taxes are calculated using the same methods as at year-end, by determining the tax expenses as of the
interim reporting date. The option pursuant to IAS 34 of making an estimate is not exercised.
F-15
13
Exchange rates
The financial statements of consolidated companies are prepared using the currency of the primary
economic environment in which the entity operates (the functional currency) and translated on the basis of
the functional currency principle using the modified reporting date rate method, in which balances are
translated from the functional currency to the reporting currency using the spot rates prevailing on the
period end, while amounts in the statement of profit or loss are translated using the period’s average
exchange rates.
The Company and its subsidiaries conduct their business in the respective functional currency, which is the
local currency. Any net gains or losses arising from the translation of equity are recognized directly in other
comprehensive income. Translation differences on monetary assets and liabilities resulting from fluctuating
exchange rates are recorded in the statement of profit or loss. If a Group company is removed from
consolidation, any translation difference is reclassified from equity to profit or loss.
The table below includes the exchange rates between the most significant currencies reported in these
financial statements and the euro for the reporting periods.
Exchange rate as of
March 31,
December 31,
2015
2014
2014
USD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SGD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
1.08
129
1.48
1.38
142
1.73
1.22
145
1.61
Average exchange
rate for the 3 M
March 31,
2015
March 31,
2014
1.13
134
1.53
1.37
141
1.74
Events after the balance sheet date
No material events occurred between the balance sheet date and the publication of this Interim Report.
May 29, 2015
Board of Siltronic AG
Christoph von Plotho
Rainer Irle
F-16
Siltronic AG and subsidiaries
Consolidated Financial Statements
as of and for years ended
December 31, 2014, 2013 and 2012
F-17
Siltronic AG and subsidiaries: Consolidated Statements of Profit or Loss
In EUR millions
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . .
Other operating income . . . . . . . . .
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Notes
For the Year Ended
December 31,
2014
2013
2012
01
01
846.0
743.0
868.0
(769.4) (658.8) (786.9)
01
01
76.6
(30.5)
(64.3)
(16.0)
82.4
(61.8)
84.2
81.1
(28.7) (34.5)
(58.8) (66.8)
(13.9) (18.9)
45.4
83.1
(81.4) (101.4)
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from investment in joint venture . . . . . . . . . . . . . . . . . . . . . . . .
02
(13.6)
(3.5)
(53.2)
(42.5)
(57.4)
(26.6)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
03
03
03
(17.1)
0.6
(2.0)
(6.3)
(95.7)
6.4
(0.3)
(9.5)
(84.0)
5.9
(0.6)
(5.7)
04
(7.7)
(24.8)
(2.2)
(3.4)
(99.1)
(10.2)
(0.4)
(84.4)
(6.2)
Net loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(27.0) (109.3)
(90.6)
Of which
attributable Siltronic AG shareholders . . . . . . . . . . . . . . . . . . . . . .
attributable to non-controlling interests . . . . . . . . . . . . . . . . . . . . .
Loss per common share in Euro (basic / diluted) . . . . . . . . . . . . . . . .
(16.0) (109.3)
(11.0)
—
(0.32) (2.19)
(90.6)
—
(1.81)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-18
18
Siltronic AG and subsidiaries: Consolidated Statement of Financial Position
Notes
In EUR millions
Investments in joint venture . .
Financial assets . . . . . . . . . . .
Other assets . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . .
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05
06
08
08
10
10
04
As of December 31,
2014
2013
2012
29.7
571.7
—
—
0.3
0.2
7.1
0.5
332.3
—
142.6
11.0
0.3
4.0
1.2
430.2
22.2
170.2
3.2
0.3
7.1
609.0
490.7
634.4
138.4
111.1
—
23.2
1.4
187.4
86.5
98.1
372.0
32.9
0.3
12.5
95.5
105.9
258.1
28.1
0.4
11.5
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
461.5
602.3
499.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,070.5
1,093.0
1,133.9
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . .
Trade receivables . . . . . . .
Financial receivables . . . .
Other assets . . . . . . . . . . .
Income tax receivables . . .
Cash and cash equivalents
Subscribed capital .
Capital reserves . . .
Accumulated deficit
Other equity items .
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09
10
11
10
10
12
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.
.
Equity attributable to Siltronic AG shareholders . . . . . . . . . . . . . .
Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.0
946.8
(548.4)
(189.3)
100.0
970.3
(262.9)
(17.2)
100.0
869.8
(153.6)
(67.9)
309.1
2.7
790.2
—
748.3
—
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
311.8
790.2
748.3
Provision for pensions . .
Other provisions . . . . . .
Provisions for income tax
Deferred tax liabilities . .
Other liabilities . . . . . . .
14
15
15
04
11
16
328.1
26.2
0.1
1.7
35.8
49.3
185.0
22.8
0.1
1.7
—
3.2
226.7
25.4
6.8
1.7
—
10.8
441.2
212.8
271.4
8.0
4.0
55.8
176.1
73.6
10.6
10.4
39.7
—
29.3
12.2
3.4
54.7
—
43.9
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
317.5
90.0
114.2
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
758.7
302.8
385.6
Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,070.5
1,093.0
1,133.9
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Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other provisions . . .
Provisions for income
Trade liabilities . . . .
Financial liabilities . .
Other liabilities . . . .
...
tax
...
...
...
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F-19
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15
15
16
11
16
Siltronic AG and subsidiaries: Consolidated Statements of Comprehensive Loss
In EUR millions
before
taxes
deferred
taxes
Net loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the Year Ended December 31,
before
deferred
before
2014
taxes
taxes
2013
taxes
(27.0)
deferred
taxes
(109.3)
2012
(90.6)
F-20
Items that will never be reclassified to profit or loss
Remeasurement of defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(135.5)
—
(135.5)
50.5
—
50.5
(75.8)
—
(75.8)
Sum of items that will never be reclassified to profit or loss . . . . . . . . . . . . . . . . .
(135.5)
—
(135.5)
50.5
—
50.5
(75.8)
—
(75.8)
Items that are or may be reclassified to profit or loss
Difference from foreign currency translation adjustments . . . . . . . . . . . . . . . .
thereof recognized in profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5.1)
(17.6)
—
—
(5.1)
(17.6)
(5.4)
—
—
—
(5.4)
—
6.4
—
—
—
6.4
—
Changes in market values of the securities available for sale . . . . . . . . . . . . . .
Changes in market values of derivative financial instruments (cash flow hedge)
Effects of net investment in a foreign operation . . . . . . . . . . . . . . . . . . . . . .
Share of cash flow hedge in joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.1)
(33.5)
(10.5)
2.6
2.1
0.1
0.1
—
—
—
—
—
—
—
(0.1)
(33.5)
(10.5)
2.6
2.1
0.1
0.1
(0.3)
9.2
(1.0)
(2.6)
—
(0.7)
—
—
—
—
—
—
—
—
(0.3)
9.2
(1.0)
(2.6)
—
(0.7)
—
0.1
6.4
(0.6)
—
—
1.8
—
—
—
—
—
—
—
—
0.1
6.4
(0.6)
—
—
1.8
—
Sum of items that are or may be reclassifed to profit or loss . . . . . . . . . . . . . . . . .
(36.0)
—
(36.0)
0.2
—
0.2
14.7
—
14.7
Other comprehensive loss/income reported in the year . . . . . . . . . . . . . . . . . . . . .
(171.5)
—
(171.5)
50.7
—
50.7
(61.1)
—
(61.1)
Total comprehensive loss/income reported in the year . . . . . . . . . . . . . . . . . . . . . .
(198.5)
(58.6)
(151.7)
Of which
attributable Siltronic AG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .
attributable to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
(188.1)
(10.4)
(58.6)
—
(151.7)
—
Siltronic AG and subsidiaries: Consolidated Statement of Cash Flows
Notes
In EUR millions
Net loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation, amortization and impairments/write-ups of non-current
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash expenses and income . . . . . . . . . . . . . . . . . . . . . . .
Result from disposal of non-current assets . . . . . . . . . . . . . . . . . . . .
Result from investment in joint venture . . . . . . . . . . . . . . . . . . . . . .
Changes in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in trade liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
(27.0) (109.3)
(90.6)
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.
149.2
(13.3)
0.2
3.5
(14.2)
6.5
(0.4)
(2.8)
5.8
(8.5)
39.5
(10.9)
(3.0)
0.1
122.1
2.5
0.2
42.5
7.4
(1.7)
(5.4)
2.7
9.1
2.7
(18.3)
(7.1)
(0.1)
0.4
92.8
(10.0)
0.1
26.6
11.3
(14.2)
5.5
(0.8)
18.9
(12.7)
(65.8)
(7.4)
(0.2)
0.3
124.7
47.7
(46.2)
..
..
(37.7)
—
(32.0)
—
(76.6)
(29.9)
..
..
0.3
26.2
0.7
—
1.1
—
Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in intangible assets, property, plant and equipment . . . .
Payments for loans in joint venture . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the disposal of intangible assets, property, plant and
equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of subsidiary, net of cash acquired . . . . . . . . . . . . . . . .
20
Cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank loans repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reduction due to transaction with shareholder . . . . . . . . .
Increase in cash pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from a credit line granted by Wacker . . . . . . . . . . . . . .
Proceeds from payments due to profit and loss transfer agreement
Proceeds from a loan granted by Wacker . . . . . . . . . . . . . . . . . . .
Utilization of funds in cash pooling . . . . . . . . . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(11.2)
.
.
.
.
.
.
.
.
Cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .
At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(31.3) (105.4)
(269.5)
—
(196.4)
—
(39.0)
—
— (122.1)
26.0
—
116.0
108.3
150.0
—
271.5
—
20
Changes due to exchange-rate fluctuations . . . . . . . . . . . . . . . . . . . .
F-21
For the Year Ended
December 31,
2014
2013
2012
12
—
(0.5)
—
—
—
14.4
—
144.4
58.6
(13.8)
158.3
2.8
(1.6)
(0.4)
174.9
12.5
1.0
11.5
6.3
5.2
187.4
12.5
11.5
Siltronic AG and subsidiaries: Consolidated Statement of Changes in Equity
Subscribed
capital
Capital
reserves
100.0
—
761.4
—
Net loss for the year . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . .
100.0
—
—
761.4
—
—
—
Capital increase due to profit and loss transfer agreement . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reduction due to transaction with shareholder . . . . . . . .
In EUR millions
January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of retroactive application of IAS 19 (revised) . . . . . . . . .
Difference
from foreign
currency
translation
adjustments
Effects of net
investments
in foreign
operations
Changes in
market values
of securities
available
for sale
Changes in
market values
of derivative
financial
instruments
(cash flow
hedge)
Remeasurement
of defined
benefit plans
Accumulated
deficit
Equity
attributable to
Siltronic AG
shareholders
Noncontrolling
interest
Total
equity
16.30
(79.30)
(6.80)
—
—
—
870.90
(79.30)
(2.7)
—
6.4
—
—
—
0.3
—
0.1
(4.4)
—
8.2
—
—
(75.8)
(63.0)
(90.6)
—
791.6
(90.6)
(61.1)
—
—
—
791.6
(90.6)
(61.1)
—
6.4
—
0.1
8.2
(75.8)
(90.6)
(151.7)
—
(151.7)
—
—
—
108.4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
108.4
—
—
—
—
—
108.4
—
—
Total contributions and distributions . . . . . . . . . . . . . . . . . .
—
108.4
—
—
—
—
—
—
108.4
—
108.4
Acquisition of subsidiary with NCI . . . . . . . . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
Total changes in ownership interests . . . . . . . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
Total transactions with owners of the company . . . . . . . . . . . .
—
108.4
—
—
—
—
—
—
108.4
—
108.4
Balance as of December 31, 2012 . . . . . . . . . . . . . . . . . . .
100.0
869.8
3.7
—
0.4
3.8
(75.8)
(153.6)
748.3
—
748.3
100.0
869.8
3.7
—
0.4
3.8
(75.8)
(153.6)
748.3
—
748.3
—
—
—
—
—
(5.4)
—
(2.6)
—
(0.3)
—
8.5
—
50.5
(109.3)
—
(109.3)
50.7
—
—
(109.3)
50.7
—
—
(5.4)
(2.6)
(0.3)
8.5
50.5
(109.3)
(58.6)
—
(58.6)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
100.5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
100.5
—
—
—
—
—
100.5
—
—
—
100.5
—
—
—
—
—
—
100.5
—
100.5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
100.5
—
—
—
—
—
—
100.5
—
100.5
100.0
970.3
(1.7)
(2.6)
0.1
12.3
790.2
—
790.2
F-22
(25.3)
(262.9)
Siltronic AG and subsidiaries: Consolidated Statement of Changes in Equity (Continued)
In EUR millions
Subscribed
capital
Capital
reserves
Difference
from foreign
currency
translation
adjustments
Effects of net
investments
in foreign
operations
Changes in
market values
of securities
available
for sale
Changes in
market values
of derivative
financial
instruments
(cash flow
hedge)
Remeasurement
of defined
benefit plans
Accumulated
deficit
Equity
attributable to
Siltronic AG
shareholders
Noncontrolling
interest
—
Total
equity
F-23
100.0
970.3
(1.7)
(2.6)
0.1
12.3
(25.3)
(262.9)
790.2
—
—
—
—
—
(5.7)
—
2.6
—
(0.1)
—
(33.4)
—
(135.5)
(16.0)
—
(16.0)
(172.1)
(11.0)
0.6
790.2
(27.0)
(171.5)
—
—
(5.7)
2.6
(0.1)
(33.4)
(135.5)
(16.0)
(188.1)
(10.4)
(198.5)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
15.5
—
(39.0)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(269.5)
—
15.5
(269.5)
(39.0)
(23.5)
(269.5)
(293.0)
—
—
—
15.5
(269.5)
(39.0)
—
(293.0)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13.1
—
—
—
—
—
—
—
—
—
13.1
13.1
—
(23.5)
—
—
—
—
—
100.0
946.8
(7.4)
—
—
(21.1)
(160.8)
13.1
(269.5)
(293.0)
13.1
(279.9)
(548.4)
309.1
2.7
311.8
Notes to the Consolidated Financial Statements of Siltronic AG and subsidiaries
Nature of Operations
Siltronic AG (the ‘‘Company’’), together with its subsidiaries (the ‘‘Group’’) is a producer of
semiconductor silicon wafers made from hyperpure silicon whose customers comprise nearly all major
semiconductor companies worldwide. Silicon constitutes the base substrate for most semiconductor devices
and silicon wafers are components of everyday electronics including, for example, smartphones, tablets,
computers, flat screens and sensors. The Group develops and manufactures silicon wafers with diameters
of up to 300 mm and operates out of wafer facilities in each of Burghausen and Freiberg, Germany, two
wafer facilities in Singapore, and one wafer facility in Portland, Oregon. In 2012, the Group closed its
wafer facility in Hikari, Japan and one wafer facility in Portland, Oregon.
For the reporting periods, the Company was a wholly-owned subsidiary of Wacker Chemie AG, with 10%
of its shares held directly by Wacker Chemie AG and 90% by Wacker-Chemie Dritte Venture GmbH,
which is a wholly-owned subsidiary of Wacker Chemie AG. From January 1, 2009 through December 31,
2014, the Company was part of a German fiscal unity for corporate income and trade tax purposes and was
subject to a control and profit and loss transfer agreement (‘‘PLTA’’) with Wacker-Chemie Dritte
Venture GmbH under which Siltronic AG was obligated to transfer its annual profit to Wacker-Chemie
Dritte Venture GmbH, who was obligated to compensate the Company for any annual GAAP losses
incurred during the term of the PLTA, determined in accordance with German accounting standards. As of
January 1, 2015, the PLTA is no longer in effect. Although the company occurred losses in the past and the
PLTA has been terminated, the going concern assumption is still appropriate based on positive cash flows
in the past and future cash flow projections of management.
Siltronic AG is located in Munich/Germany, Hanns-Seidel-Platz 4. Wacker Chemie AG and
Wacker-Chemie Dritte Venture GmbH are located there, too.
Basis of Presentation
The consolidated financial statements of the Group have been prepared in accordance with the
International Financial Reporting Standards (IFRS) and related interpretations issued by the IFRS
Interpretations Committee (IFRIC). The financial statements of the Group comply with IFRS as adopted
by the EU. The Group has applied all standards and interpretations that were effective as at December 31,
2014.
The fiscal year corresponds to the calendar year. Assets and liabilities are reported in the statement of
financial position in line with their maturities. The Group classifies assets and liabilities as current if it
expects to realize or settle them within 12 months. The statement of profit or loss is prepared using the
cost of sales method.
The consolidated financial information is presented in euro, which is the Company’s functional currency
and the Group’s reporting currency. All amounts are shown in millions of euros (E mn) unless otherwise
stated.
Accounting Standards Applied for the First Time in 2014
Mandatory application January 1, 2014
IFRS 10 ‘‘Consolidated Financial Statements’’ (endorsed by the EU on December 11, 2012): IFRS 10
changes the definition of ‘‘control’’ so that the same criteria are applied to all companies in determining
control. The standard replaces the consolidation guidelines in IAS 27 and SIC 12. Application of the
revised standard has no influence on the current determination of the scope of consolidation for the
Group.
IFRS 11 ‘‘Joint Arrangements’’ (endorsed by the EU on December 11, 2012): IFRS 11 governs the
accounting of arrangements where a company exercises joint control over a joint venture or a joint
operation. The standard replaces IAS 31. In the future, joint ventures will be accounted for using the
equity method only. The option of proportionate consolidation has been abolished. This has no impact on
the Group’s earnings, net assets or financial position because the Group has always accounted for joint
ventures using the equity method.
F-24
IFRS 12 ‘‘Disclosure of Interests in Other Entities’’ (endorsed by the EU on December 11, 2012): IFRS 12
regulates the disclosures in the consolidated financial statements that enable readers of the financial
statements to assess the nature, risk and financial effects of the entity’s involvement in subsidiaries,
associates, joint arrangements and unconsolidated structured entities. Application of the revised standard
leads to a broadening of the disclosures in the Group’s consolidated financial statements.
Amendments to IAS 27 ‘‘Separate Financial Statements’’ (endorsed by the EU on December 11, 2012):
IAS 27 now deals only with separate financial statements. The existing guidelines for separate financial
statements remain unchanged. Application of the revised standard has no impact on the Group’s earnings,
Amendments to IAS 28 ‘‘Investments in Associates and Joint Ventures’’ (endorsed by the EU on
December 11, 2012): IAS 28 now also governs the accounting of joint ventures using the equity method.
Application of the revised standard has no impact on the Group’s earnings, net assets or financial position,
or on the presentation of its financial statements.
Amendments to IFRS 10, IFRS 11 and IFRS 12 ‘‘Transition Guidance’’ (endorsed by the EU on April 4,
2013): The purpose of the amendments is to clarify the transition guidance in IFRS 10. Additionally, they
facilitate the transition to IFRS 10, IFRS 11 and IFRS 12. Application of the changes had no impact on the
Group’s earnings, net assets or financial position, or on the presentation of its financial statements.
Amendments to IAS 32 ‘‘Offsetting Financial Assets and Financial Liabilities’’ (endorsed by the EU on
December 13, 2012): This amendment clarifies the requirements for offsetting of financial instruments.
Application of the revised standard has no substantial impact on the Group’s earnings, net assets or
financial position.
Amendments to IFRS 10, IFRS 12 and IAS 27 ‘‘Investment Entity’’ (endorsed by the EU on November 20,
2013): The changes focus primarily on redefinition of the term ‘‘investment entity.’’ The amendments have
no impact on the Group’s earnings, net assets or financial position, or on the presentation of its financial
statements.
Amendments to IAS 36 ‘‘Impairment of Assets—Recoverable Amount Disclosures for Non-Financial
Assets’’ (endorsed by the EU on December 19, 2013): IFRS 13 ‘‘Fair Value Measurement’’ introduced a
new rule amending IAS 36 ‘‘Impairment of Assets.’’ It requires disclosure of the recoverable amount of
every cash generating unit (or group of cash-generating units) for which a substantial amount of goodwill
or substantial intangible assets of indefinite useful life have been recognized. The change limits this
disclosure requirement. This provision applies only if impairment or reversal of an impairment loss is
recognized in the current period. The amendments in connection with IAS 36 have no impact on the
Group’s earnings, net assets or financial position, or on the presentation of its financial statements.
Amendments to IAS 39 ‘‘Novation of Derivatives and Continuation of Hedge Accounting’’ (endorsed by
the EU on December 19, 2013): Due to the EU regulation on OTC derivatives, central counterparties and
trade repositories (also known as EMIR), clearing via a central counterparty is planned for standardized
OTC derivatives. Under the old version of IAS 39, the clearing obligation and the related novation to a
central counterparty led to termination of the hedging relationship under hedge accounting and thus to
ineffectiveness compared to the prior hedging relationship. The amendment states that, under certain
conditions, clearing via a central counterparty shall not lead to termination of the hedging relationship,
and that the hedge shall continue to qualify for hedge accounting in accordance with IAS 39. The
amendments in connection with IAS 39 have no impact on the Group’s earnings, net assets or financial
position, or on the presentation of its financial statements, since the Group does not have any OTC
derivatives that are subject to the clearing obligation.
Accounting Standards and Interpretations Not Yet Applied
The following new standards, interpretations, and changes to existing standards have been endorsed by the
EU but application is not yet mandatory for the period under review but. The Group is not applying any of
these standards, interpretations, and changes to existing standards earlier than required. The Group
continuously evaluates new standards, interpretations, and changes to existing standards to determine their
impact on the consolidated financial statements.
F-25
Mandatory application in the fiscal year 2015
IFRIC 21 „Levies‘‘ (endorsed by the EU on June 13, 2014, mandatory application from January 1, 2015):
This IFRIC contains rules for the recognition of obligations to pay public levies that are not defined as
taxes within the meaning of IAS 12 „Income Taxes‘‘. It has no impact on Siltronic’s earnings, net assets or
financial position, or on the presentation of its financial statements.
Improvements to IFRS 2011-2013 (endorsed by the EU on December 18, 2014, mandatory application
from June 17, 2014): Improvements refer to the standards IFRS 1, IFRS 3, IFRS 13, IAS and IAS 40. The
changes have no material impact on Siltronic’s earnings, net assets or financial position, or on the
presentation of its financial statements.
Mandatory application in the fiscal year 2016
Amendments to IAS 19 „Defined Benefit Plans: Employee Contributions‘‘ (endorsed by the EU on
December 17, 2014, mandatory application from February 1, 2015): The amendments clarify those
regulations that concern the allocation of contributions by employees or third parties to service periods in
cases where the contributions are linked to the same period of service. In addition, relief is granted in cases
where the contributions are independent of the number of years of service. The amendments have no
impact on Siltronic’s earnings, net assets or financial position, or on the presentation of its financial
statements.
Improvements to IFRS 2010-2012 (endorsed by the EU December 17, 2014, mandatory application from
February 1, 2015): Improvements refer to the standards IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24
and IAS 38. The changes have no material impact on Siltronic’s earnings, net assets or financial position,
or on the presentation of its financial statements.
Application of the following new standards, interpretations, and changes to existing standards is not yet
mandatory for the period under review or they have not yet been endorsed by the EU. The Group is not
applying any of these standards, interpretations, and changes to existing standards earlier than required.
The Group continuously evaluates new standards, interpretations, and changes to existing standards to
determine their impact on the consolidated financial statements.
Amendment to IFRS 11 ‘‘Accounting for Acquisitions of Interests in Joint Operations’’ (published by the
IASB on May 6, 2014; endorsement by the EU expected in the first quarter of 2015): This amendment
clarifies that the acquisition and accumulation of interests in joint operations that represent a business (as
defined by IFRS 3 ‘‘Business Combinations’’) should be recognized by applying the accounting principles
for business combinations in IFRS 3 and other applicable IFRSs, unless these conflict with IFRS 11. This
clarification currently has no impact on the Group’s earnings, net assets or financial position, or on the
Amendment to IFRS 14 ‘‘Regulatory Deferral Accounts’’ (published by the IASB on January 30, 2014;
endorsement by the EU not yet defined): The standard allows entities preparing IFRS statements for the
first time to include in these statements so-called regulatory deferral accounts recognized under current
national accounting standards for rate-regulated activities. No impact of the Group’s consolidated financial
statements will result from this amendment.
Amendment to IAS 16 and 38 ‘‘Clarification of Acceptable Methods of Depreciation and Amortization’’
(published by the IASB on May 12, 2014; endorsement by the EU expected in the first quarter of 2015):
The amendment clarifies that the use of revenue based methods to calculate the depreciation of an asset is
not appropriate since depreciation does not reflect consumption of the expected future economic benefits
embodied in the asset. This also applies to intangible assets with a limited useful life. The presumption
here, however, can be rebutted. The amendment also clarifies that a decline in sales prices of the goods
produced can serve as an indicator of the commercial obsolescence of property, plant and equipment. The
Group uses only straight-line depreciation over the expected useful life of such assets. Thus, the
clarification has no impact on the Group’s earnings, net assets or financial position, or on the presentation
of its financial statements
Amendment to IAS 16 and 41 ‘‘Financial Reporting for Bearer Plants’’ (published by the IASB on June 30,
2014; endorsement by the EU expected in the first quarter of 2015): IAS 41 currently requires all biological
assets related to agricultural activity to be measured at fair value less estimated costs to sell. In the absence
F-26
of relevant circumstances, the amendment has no impact on the Group’s earnings, net assets or financial
position, or on the presentation of its financial statements.
Amendments to IFRS 10 and IAS 28 ‘‘Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture’’ (published by the IASB on September 11, 2014; endorsement by the EU
expected in the fourth quarter of 2015): The investor’s gain or loss must always be recognized in full if a
transaction constitutes a business as defined in IFRS 3. The application has no impact on the Group’s
earnings, net assets or financial position, or on the presentation of its financial statements.
Amendments to IFRS 10, IFRS 12 and IAS 28 ‘‘Investment Entities: Applying the Consolidation
Exceptions’’ (published by the IASB on December 18, 2014; endorsement by the EU expected in the fourth
quarter of 2015): The amendments changed the definition for investment entities and exclude these
entities from the scope of IFRS 10. The amendments have no impact on the Group’s earnings, net assets
or financial position, or on the presentation of its financial statements.
Amendments to IAS 27 ‘‘Equity Method in separate Financial Statements’’ (published by the IASB on
August 12, 2014; endorsement by the EU expected in the third quarter of 2015): Application of the
amendments will have no impact on the Group’s earnings, net assets or financial position, or on the
Amendments to IAS 1 ‘‘Disclosure Initiative’’ (published by the IASB on December 18, 2014; endorsement
by the EU expected in the fourth quarter of 2015): Application of the amendments is expected to result in
broader disclosure details in the Group’s financial statements.
Improvements to IFRS 2012-2014: The improvements relate to IFRS 5, IFRS 7, IAS 19 and IAS 34. Their
application has no substantial impact on the Group’s earnings, net assets or financial position.
Amendment to IFRS 15 ‘‘Revenue from Contracts with Customers’’ (published by the IASB on May 28,
2014; endorsement by the EU in the expected second quarter of 2015): IFRS 15 sets out that an entity shall
recognize revenue whenever the customer obtains control of, and can draw an economic benefit from the
promised goods and services. The transfer of significant risks and rewards of ownership is no longer of
primary importance, as was still the case under the old IAS 18 ‘‘Revenue’’ rules. Revenue shall be
recognized in an amount that reflects the consideration to which an entity expects to be entitled. The new
model provides a five step framework for recognizing revenue, which first identifies the contract with a
customer and the performance obligations it entails, and then determines and allocates the transaction
price. The revenue shall be recognized for each individual performance obligation when the customer
obtains control of the good or service. The Group is currently evaluating the new standard to determine its
impact on the recognition of revenue. At the moment, Siltronic cannot conclusively assess what impacts the
first-time application of this standard will have in its earnings, net assets or financial position, or on the
presentation of its financial statements. The new standard will result in broader disclosure details in
Siltronic’s financial statements. The new standard will result in broader disclosure details in the Group’s
IFRS 9 „Financial Instruments‘‘ and subsequent amendments to IFRS 9, IFRS 7 and IAS 39 (published by
the IASB on July 24, 2014; endorsement by the EU expected in the second half of 2015): According to the
new standard, financial assets will be valued either at amortized acquisition cost or at fair value depending
on the business model of the company. The Group expects that IFRS 9 will impact the classification and
the measurement of its financial assets but has not yet completed the determination of the impact on its
consolidated financial statements.
Scope of Consolidation
Subsidiaries
Subsidiaries are defined as companies in which the Company directly or indirectly holds a voting majority
or has, in any other way, the power to govern the financial and business policies of an entity in order to
benefit from its activities. In assessing control, the Company takes into account potential voting rights that
are currently exercisable or convertible. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
F-27
The table below shows the subsidiaries reflected in the financials by means of consolidation as of
December 31 of the respective year. The percentages noted refer to the interest Siltronic has directly or
indirectly in the respective companies:
2014
2013
2012
Europe
Siltronic Holding International B.V., Krommenie/Netherlands . . . . . . . . . . . . . . . . .
Wacker-Chemie Beteiligungsfinanzierungs GmbH, Munich/Germany . . . . . . . . . . . .
Wacker-Chemie Erste Venture GmbH, Munich/Germany . . . . . . . . . . . . . . . . . . . .
100% 100% 100%
— 100% 100%
— 100% 100%
North America
Siltronic Corp., Portland (Oregon)/USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100% 100% 100%
Asia excluding Japan
Siltronic Asia Pte. Ltd., Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Siltronic Singapore Pte. Ltd., Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Siltronic Silicon Wafer Pte. Ltd., Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100% 100% 100%
100% 100% 100%
78% —
—
Japan
Siltronic Japan Corporation, Tokyo/Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100% 100% 100%
Joint Ventures
A joint venture is an arrangement in which the Group has joint control whereby the Group has rights to
the net assets of the arrangement rather than rights to its assets and obligation for its liabilities. Joint
ventures are accounted for in the consolidated financial statements using the equity method.
Changes in Consolidation
Siltronic Silicon Wafer Pte. Ltd. (‘‘SSW’’) was established in 2006 under the name Siltronic Samsung
Wafer Pte. Ltd. as a joint venture company organized under the laws of Singapore. The Dutch subsidiary of
the Group called Siltronic Holding International B.V. on one hand and Samsung Electronics (‘‘Samsung’’)
on the other hand were holding a 50% share each in SSW. Prior to January 24, 2014, neither shareholder
could exercise control over SSW because of the percentage each held in connection with the articles of
association. The Company accounted for the investment in SSW using the equity method. The impact on
the statement of profit or loss resulting from SSW when accounted for using the equity method was shown
in the line item ‘‘Loss from investment in joint venture’’.
Based on an agreement dated January 24, 2014, the Group increased its share in the joint venture from
50% to 78% by means of a capital increase of SGD 150 mn (equivalent to approximately E 86 mn). In
connection with the transaction the Group made an additional loan to SSW and prepayments for wafers.
Samsung also provided prepayments to SSW and SSW used the funds to repay all its banks loans (which
resulted from the initial project financing of the joint venture). The repayment of the bank loans amounted
to approximately SGD 341 mn (equivalent to approximately E 196 mn).
The acquisition of the additional 28% share in SSW was accounted for in accordance with the rules for
step acquisitions provided for in IFRS 3. Valuations including a purchase price allocation were completed
when preparing the financial statements of the Group for the year 2014.
The acquisition of the majority stake in SSW and consolidation into the Group had a significant impact on
the Company’s statement of financial position and statement of profit or loss. Hence, it is difficult to
compare the financial statements from 2014 with those from preceding periods.
Consolidation Methods
The consolidated financial statements are based on the separate financial statements of the Company and
its consolidated subsidiaries for the calendar year.
Investments accounted for using the equity method are initially measured at cost when the acquisition is
made. If the cost exceeds the pro rata share of equity, the difference (goodwill) is included in the carrying
amount of the investment. If the cost is lower than the share of equity at the time of acquisition, this
difference is included in the carrying amount and recorded in the statement of profit or loss as ‘‘Loss from
investments in joint venture’’. The carrying amount increases or decreases annually to reflect pro rata
earnings, dividend payouts or other changes in equity. If there is determination that the value of the
F-28
investment has been reduced below its carrying amount, an impairment is recognized in the statement of
profit or loss.
Intragroup balances and transactions and any related unrealized income and expenses are eliminated.
Unrealized gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the
same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Acquisitions
The Group accounts for its business combinations using the acquisition method when control is transferred
to the Group. The consideration transferred is generally measured at fair value and allocated to the
identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a
bargain purchase is recognized in profit and loss immediately. Transaction costs are expensed as incurred.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity than it is
not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair
value of the contingent consideration are recognized in profit and loss.
Loss of control
When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary
and any related non-controlling interest and other components of equity. Any resulting gain or loss is
recognized in profit or loss.
Foreign Currency Translation
The financial statements of consolidated companies are prepared using the currency of the primary
economic environment in which the entity operates (the functional currency) and translated on the basis of
the functional currency principle using the modified reporting date rate method, in which balances are
translated from the functional currency to the reporting currency using the spot rates prevailing on the
period end, while amounts in the statement of profit or loss are translated using the period’s average
exchange rates.
The Company and its subsidiaries conduct their business in the respective functional currency, which is the
local currency. Any net gains or losses arising from the translation of equity are recognized directly in other
comprehensive income. Translation differences on monetary assets and liabilities resulting from fluctuating
exchange rates are recorded in the statement of profit or loss. If a Group company is removed from
consolidation, any translation difference is reclassified from equity to profit or loss.
In 2013, the Group designated a long-term loan denominated in a foreign currency as a net investment in a
foreign operation in accordance with IAS 21. The currency translation differences in connection with this
loan were recognized in other comprehensive income.
The table below includes the exchange rates between the most significant currencies reported in these
financial statements and the euro for the reporting periods.
2014
December 31,
2013
2012
Average for the year
2014
2013
2012
U.S. Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2155 1.3770 1.3196 1.3269 1.3278 1.2850
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145.35 144.72 113.51 140.45 129.37 102.46
Singapore Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6056 1.7416 1.6120 1.6816 1.6611 1.6055
Estimates and Assumptions Used in Preparing the Consolidated Financial Statements
The preparation of the consolidated financial statements in compliance with IFRS requires management
to make assumptions and estimates that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses and contingencies. These assumptions and estimates
impact the carrying amount of assets and liabilities at period end and the amount of income and expenses
for the period. The assumptions on which the estimates are based relate primarily to the uniform
F-29
determination of useful lives throughout the Group, the determination of fair values of financial
instruments, the recognition and measurement of provisions, the probability of realizing future tax
benefits, and cash flow projections which were used for impairment test and purchase price allocation
purposes.
The actual results may differ from these assumptions and estimates. Changes in accounting estimates are
recognized as soon as they become apparent and affect the net results for the period in which the estimates
have changed and in any future periods affected.
Intangible assets and property, plant and equipment
The expected useful life of intangible assets and of property, plant and equipment, together with their
amortization or depreciation schedules, is based on past experience, plans and estimates.
Impairment tests are performed for assets if specific indicators point toward a possible impairment loss or
reversal of an impairment loss. Goodwill is tested annually for impairment. In the case of an impairment
test, an estimate must be made of the recoverable amount of the affected cash-generating unit that
corresponds to the higher of the fair value less costs to sell or the value in use. To assess the value in use,
the discounted future cash flows of the affected cash-generating unit are to be determined. The estimate of
the discounted future cash flows contains significant assumptions, in particular relating to future selling
prices for and sales volumes of wafers, development of costs and discount rates. Although the Group
assuming that the estimates of the relevant expected useful lives and of discounted future cash flows, as
well as the assumptions regarding the general economic conditions and the development of the economic
sectors are reasonable, a change in the assumptions or circumstances might require a change in the
analysis. This could result in additional impairments or reversals of impairment losses in the future.
The carrying amount of intangible assets and property, plant and equipment as at December 31, 2014
amounted to A601.4 mn.
Defined benefit obligations
The accounting of pensions and similar obligations is in accordance with actuarial valuations. These
valuations are based on statistical and other factors in order to anticipate future events. The factors include
the discount rate, expected salary and pension increases, the mortality rate and rate increases for
preventive healthcare. If market and economic conditions change, these assumptions could vary
considerably from actual developments, consequently leading to major changes in pension and similar
obligations, as well as the associated future expenses.
The provision recorded for pension obligations is valued by discounting the Group-specific, expected
future cash flows. The discount rate is derived from the yield curve of high-grade, fixed interest corporate
bonds with maturities matching the pension obligations. The bonds are denominated in the same currency
as their underlying pension obligations and have a rating of at least AA from one of the three major rating
agencies. This is based on information as of the closing date and on a maturity that approximates the
maturity of the pension obligation.
The provision for pensions amounts to E 328.1 mn as at December 31, 2014.
Deferred tax assets
At the end of each period, the Group assesses whether the probability of future tax benefits is sufficient to
recognize deferred taxes. Among other things, this requires that management evaluates the tax benefits
resulting from currently available tax strategies and future taxable income, as well as taking additional
positive and negative factors into account.
Deferred tax assets as at December 31, 2014 amount to E 7.1 mn.
Basic Accounting and Valuation Methods
The Company and its subsidiaries apply uniform methods for the recognition and valuation of assets,
liabilities, income and expense.
Assets and liabilities of the Group’s consolidated financial statements are based on acquisition and
production costs (‘‘historical costs’’), with the exception of the items reflected at fair value. In particular,
derivative financial instruments and plan assets used to cover future pension obligations are recorded at
fair value.
F-30
Other accounting methods and the valuations methods have been applied consistently.
Intangible Assets
Intangible assets acquired are measured at cost and, if their useful lives can be determined, are amortized
on a straight-line basis. The useful life is reviewed annually and, if necessary, revised to correspond to new
expectations. Amortization of intangible assets (apart from goodwill) is allocated to the functional areas
that use the assets. Intangible assets with indefinite useful lives are subject to an annual impairment test. In
the periods presented, no intangible assets with indefinite useful lives have been capitalized.
Internally generated intangible assets are capitalized if it is probable that a future economic benefit can be
associated with the use of the asset and the costs of the asset can be determined reliably.
Such assets are recognized at cost and amortized on a straight-line basis. Their stated useful lives
correspond to those of the intangible assets acquired against payment. The capitalization of development
cost does not play a role for the Group because development cost refers to existing products and processes
respectively or because future cash inflows are too uncertain.
Property, Plant and Equipment
Property, plant and equipment is capitalized at cost and depreciated on a straight-line basis over its
expected economic life. The useful life is reviewed annually and, if necessary, revised to correspond to new
expectations. In addition to the purchase price, acquisition costs include incidental acquisition costs as well
as any obligation incurred for the demolition. Property, plant and equipment is not revalued on the basis of
the provisions in IAS 16. Day-to-day maintenance and repair costs are expensed as incurred. Costs for
replacing parts or carrying out major overhauls of property, plant and equipment are capitalized if future
economic benefits are likely accrue to the Group and if the costs can be measured reliably.
If property, plant and equipment is permanently shut down, sold or given up, the acquisition or production
costs are derecognized, along with the corresponding accumulated depreciation. Any resulting gain or loss
from the sale of an asset is recognized under other operating income or expenses.
Financing costs that were incurred in connection with particular, qualifying assets and which can be
attributed directly or indirectly to them are capitalized as part of acquisition or production costs until the
assets are used for the first time. For the periods presented there are no qualifying assets.
Regular Depreciation and Amortization
Depreciation and amortization are recognized on the straight-line method and based on the following
useful lives:
Useful lives
Intangible assets . . . . . . . . . .
Production buildings . . . . . . .
Other buildings . . . . . . . . . . .
Machinery and equipment . . .
Factory and office equipment
Years
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3 to 5
20 to 30
10 to 30
6 to 12
3 to 10
If, having been measured in accordance with the above principles, the carrying amounts of intangible assets
or items of property, plant and equipment that were amortized or depreciated are higher than their
recoverable amounts as of the reporting date, corresponding impairment losses are recognized as an
expense.
The Group reviews regularly the residual value and the useful life of assets.
At the end of every balance sheet date, the Group checks whether there are triggering events for
recognizing (or reversing) impairments. An impairment loss is then recognized in the amount by which the
carrying amount exceeds the recoverable amount. The recoverable amount is the higher amount of the fair
value less costs to sell, and the value in use.
F-31
Government Grants
Government grants that relate to the acquisition of an asset reduce acquisition and production costs and
are recognized in profit and loss as the asset is depreciated or amortized. Unless otherwise indicated, these
grants (investment incentives) are provided by government bodies.
Grants that are compensation for expenses or losses already incurred are recognized as separate assets if
the company is of the opinion that all material obligations have been fulfilled and the necessary application
form has been or will be submitted. Such grants are recognized as other operating income.
Inventories
Inventories are measured at cost using the average cost method. Lower net realizable values or prices are
taken into account by means of impairments to fair value less costs to sell. In particular, the cost of goods
sold includes directly attributable costs, appropriate portions of indirect material and labor costs and
regular depreciation. Due to the short-term production processes, financing costs are not included as part
of acquisition or production costs. The overhead cost allocations are determined on the basis of a specific
capacity utilization.
Write-downs are recognized for inventory risks resulting from obsolescence or reduced usability or to
reflect other reductions in the recoverable amount.
Unfinished and finished goods are combined for disclosure purposes due to the nature of the wafer
production process.
Financial Instruments and Derivatives
A financial instrument is a contract that gives rise to a financial asset in one party and a financial liability
or equity instrument in another party. Financial instruments are recognized in the consolidated financial
statements at the time that the Group becomes a contracting party to the financial instrument.
In general, financial assets and financial liabilities are not offset. A net amount is presented only if the
Group currently has a right to offset the recognized amounts and intends to settle on a net basis.
Financial instruments are measured at fair value on initial recognition. The transaction costs directly
attributable to the acquisition must be taken into account for all financial assets and liabilities not
subsequently measured at fair value through profit or loss. The fair values recognized in the statement of
financial position generally correspond to the market prices of the financial assets and liabilities. The fair
value of financial instruments is equal to the amount the Group would receive or pay if it exchanged or
settled the financial instruments. If available, quoted market prices are used for financial instruments.
Otherwise, fair values are calculated based on the market conditions prevailing on the valuation date,
typically interest rates and exchange rates. The fair value is calculated using mathematical models, typically
by discounting future cash flows using the market interest rate or by applying standard option-pricing
models.
The Group’s financial assets comprise cash and cash equivalents, trade receivables, loans granted and
other receivables, held-to-maturity financial instruments, and primary and derivative financial assets held
for trading. Financial liabilities must generally be settled in cash or for another asset. This includes trade
payables, loans received and derivative financial liabilities. The Group makes no use of its option to
measure financial liabilities at fair value through profit or loss.
The manner in which financial assets and liabilities are subsequently measured depends on whether a
financial instrument is held for trading or held-to-maturity, whether such a financial instrument is available
for sale, or whether the financial assets concerned are loans and receivables granted by the Company.
Loans and receivables are non-derivative financial assets that are not quoted in an active market. They are
measured at amortized cost using the effective interest method. All other primary financial assets, which
include equity instruments and debt instruments not held-to-maturity, are classified as available for sale
and reported at fair value if their fair value can be determined reliably.
Derivative financial instruments are always measured at fair value, irrespective of the purpose or intention
for which they were concluded. Positive market values are recognized as a receivable and negative market
values as a liability.
F-32
Changes in the market value of derivatives used to hedge the risk of future cash flows denominated in a
foreign (cash flow hedges) are recognized in other comprehensive income. The accumulated amount of
comprehensive income of the hedging instrument is not released to the statement of profit or loss until the
hedged item is realized. If such a derivative is sold or the hedging relationship is discontinued, the change
in its value continues to be reported under other equity items until the underlying transaction occurs. Steps
taken to hedge the risk of changes in the market values of recognized assets or liabilities, or to hedge
unrecognized fixed contractual obligations, lead to fair value hedges. Changes in fair values are recorded
for both the hedged underlying transaction and the derivative financial instruments used for hedging, and
are presented in the statement of profit or loss.
Derivative financial instruments are used for hedging purposes only to reduce the Group’s exposure to
foreign currency exchange rates. The Group does not hedge any net investments in foreign operations.
Contracts concluded in order to receive or deliver non-financial goods for the Group’s own use are not
accounted for as derivatives, but treated as pending transactions.
For further information see note 19 Financial Instruments.
Receivables and Other Assets, Cash and Cash Equivalents
Trade receivables and other assets (including tax receivables), with the exception of financial derivatives,
are generally recognized at cost. Risks are taken into account through appropriate valuation allowances.
Allowances for uninsured receivables—or for the deductible in the case of insured re-ceivables—are made
whenever legal action is taken. If payment of a receivable is no longer expected even though legal action
has been taken, the gross receivable is derecognized and any valuation allowances made are reversed.
Non-current receivables which are non-interest-bearing or low-interest-bearing are discounted.
Generally, cash and cash equivalents comprise cash in hand, demand deposits, and financial assets that can
be converted into cash at any time and are only subject to an insignificant risk of changes in value.
Deferred Taxes
Deferred tax assets and liabilities are recognized for temporary differences between tax bases and carrying
amounts. The deferred tax assets include existing loss carryforward, the realization of which is assured with
sufficient probability. Deferred taxes are determined on the basis of the tax rates which, under current law,
are applicable or anticipated in the individual countries when they are realized. Deferred tax assets and
liabilities are offset only to the extent possible under the same tax authority.
The change of deferred tax assets and liabilities is recognized in the statement of profit or loss. In cases
where profits or losses are recognized in other comprehensive income, the deferred tax effect is likewise
posted under other comprehensive income.
Until January 1, 2015 the Company was part of a fiscal unity in Germany with Wacker Chemie AG. As
such, the Company was not a separate tax payer subject to income tax in Germany. For purposes of these
consolidated financial statements, the Company reports German income taxes as if it had been a separate
taxpayer.
Provision for pensions—defined benefit plans
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit
obligations is performed annually using the projected unit credit method. When the calculation results in a
potential asset for the Group the recognized asset is limited to the present value of economic benefits
available in the form of any future refunds from the plan or reductions in future contribution to the plan.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return
on plan assets (excluding interest income) and the effect of the asset ceiling (if any), are recognized
immediately in other comprehensive income. Actuarial gains and losses are arising from the difference
between the estimate at the start of the period and actual outcome at the end of the period in relation to
mortality rates, retirement and salary trends and discount rates.
The Group determines the net interest expense on the net defined liability for the period by applying
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the
F-33
then-net defined benefit liability, taking into account any changes in the net defined benefit liability during
the period as a result of contributions and benefit payments. Net interest expense and other expenses to
defined benefit plans are recognized in profit and loss.
If the present value of a defined benefit obligation changes due to a plan modification or curtailment, the
Group recognizes the effect as past service cost. This is immediately recognized in profit or loss when it
occurs. The profits and losses resulting from settlement are also recognized immediately in the statement
of profit or loss when settlement takes place. Administrative expenses that are not related to the
management of plan assets are likewise recognized in profit or loss when incurred. The expense incurred in
funding the pension provisions (service cost) is allocated to the costs of the functional areas concerned.
The interest cost is reported under other financial result.
Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future
payments is available.
Provisions for Early Retirement and Anniversaries
Provisions for early retirement and anniversaries are measured in accordance with actuarial appraisals and
belong to other long-term employee benefits. The Group’s net obligation is the amount of future benefits
that employees have earned in return for their service in the current and prior periods. That benefit is
discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in
which they arise.
Provisions for early retirement are linked to the rendering of future service.
The provisions are recognized on a pro rata basis over the service period during the work phase. The part
of the provision that amounts salary that employees forgo during the work phase, is secured with plan
assets. The provision for early retirement represents the Group’s net liability, i.e. after the plan assets have
been offset against the total obligation. The additional compensation granted is not completely earned
until the required work has been rendered in full by the employees.
Other Provisions
Provisions are recognized in the statement of financial position for present legal or constructive obligations
toward third parties if an outflow of resources to settle these obligations is probable and its amount can be
reliably estimated. The amounts recognized are based on what will be required to cover the Group’s future
payment obligations, identifiable risks and contingencies. As a rule, cost components that are capitalized
under inventories are included in the measurement of other provisions. Significant future price increases
are taken into account in the measurement.
Non-current provisions are measured at the discounted present value as of the reporting date. The
discount rate applied is the current market interest rate for risk-free investments with terms corresponding
to the residual term of the obligation to be settled. Expected refunds, provided that they are sufficiently
certain or legally enforceable, are not offset against provisions. Instead, they are capitalized as separate
assets.
Provisions for restructuring costs are recognized if a detailed formal plan for restructuring has been drawn
up and conveyed to the affected parties. Termination benefits are expensed at the earlier of when the
Group can no longer withdraw the offer of those benefits and when the Group recognizes costs for a
restructuring.
Provisions for contingent losses arising from onerous contracts are recognized if the expected benefits to
be derived from a contract are lower than the unavoidable costs of meeting the contractual obligations.
Provisions for environmental protection are recognized if the future cash outflows for complying with
environmental legislation or for cleanup measures are likely, the costs can be estimated with sufficient
accuracy and no future acquired benefit can be expected from the measures.
If an amended estimate results in a reversal of a provision, the impact is presented in the same line item of
the statement of profit or loss as the original estimate. If the original estimate has been presented in other
operating expense the reversal would be presented in other operating income.
F-34
Liabilities
Trade payables and other liabilities including tax liabilities are measured at amortized cost using the
effective interest method.
Financial liabilities are measured at fair value on initial recognition. For all financial liabilities not
subsequently measured at fair value through profit or loss, the transaction costs directly attributable to the
acquisition are included in the recognized liability.
Sales Recognition
Sales represent the fair value of the consideration received for the goods and services that were sold within
the scope of ordinary activities. These are reported without value-added and other taxes incurred in
connection with sales and net of discounts and price reductions. Sales from products are recognized when
the goods have been delivered and the main risks of ownership have passed to the purchaser. Sales from
services are recognized once services are rendered. The Group does not conduct any business that requires
using the percentage-of-completion method for recognizing sales of long-term production contracts.
Cost of Goods Sold
Cost of goods sold comprise the manufacturing costs for products, the purchase price for trade products,
the costs incurred for services rendered to a customer. In addition to directly attributable costs such as raw
materials and supplies, direct labor and energy costs, cost of goods sold includes regular depreciation,
appropriate overhead cost allocated to manufacturing activities and inventory valuation allowances. Cost
for freight-in and freight-out are part of the cost of goods sold.
Selling expenses, Research and Development Costs and Administration expenses
Selling expenses include costs incurred by the sales organization and the cost of market research,
application support on customers’ premises and commission expenses.
Research and development expenses cover costs incurred in the development of products and processes.
Research costs in the narrow sense are recognized as expenses when they are incurred, i.e. not capitalized.
Development costs are capitalized only if all the prescribed recognition criteria have been met, i.e. the
research phase can be separated clearly from the development phase, and the costs incurred can be
allocated to the individual project phases without any overlaps. Additionally, there must be sufficient
certainty that future cash inflows will realize.
General administration expenses include the pro rata payroll and material costs of corporate control
functions, human resources, and accounting and information technology, unless they have been charged as
an internal service to other functional areas.
Timing of Recognition of Income and Expenses
Operating expenses are reported as expenses when the service is utilized and interest income is accrued
using the effective interest rate.
F-35
01
Sales, Cost of Sales, Other Operating Income and Other Operating Expenses
In EUR millions
For the Year Ended
December 31,
2014
2013
2012
Sales
Product sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services and license fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
838.4
7.6
724.7
18.3
845.3
22.7
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
846.0
743.0
868.0
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof inventory write down / reversal of write down . . . . . . . . . . . . . . . .
Other operating income
Gains from currency transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain from the remeasurement of assets in the course of the consolidation
of SSW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from reversal of provisions related to restructuring . . . . . . . . . . .
Government grants for research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from reversal of provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from disposal of property, plant and equipment . . . . . . . . . . . . .
Income from reversal of valuation allowances for receivables . . . . . . . . . .
Miscellaneous other operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
(769.4) (658.8) (786.9)
(0.7)
3.5
(2.1)
.
74.0
35.5
61.4
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.
.
3.5
1.6
0.8
0.6
0.3
0.1
1.5
—
0.6
1.6
3.4
0.4
0.7
3.2
—
3.0
1.8
6.7
4.2
0.4
5.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82.4
45.4
83.1
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.
(49.1)
(8.9)
(0.5)
(0.4)
—
(0.2)
(2.7)
(34.2)
(34.8)
(0.6)
(1.1)
(1.7)
(2.8)
(6.2)
(58.7)
(2.5)
(0.8)
(6.6)
(7.8)
(11.6)
(13.4)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61.8)
(81.4) (101.4)
Other operating expenses
Losses from currency transactions . . . . . . . . . . . . . . . . . . . .
Losses from impairment of property, plant and equipment . .
Losses from disposal of property, plant and equipment . . . . .
Losses from additions to valuation allowances for receivables
Wind-down cost in Hikari and Portland . . . . . . . . . . . . . . . .
Personnel cost related to restructuring . . . . . . . . . . . . . . . . .
Sundry other operating expenses . . . . . . . . . . . . . . . . . . . . .
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Gains from currency transactions and gain from the remeasurement of assets in the course of the consolidation
of SSW
Gains from currency transactions include E 17.6 mn resulting from the reclassification of gains recorded in
other equity items prior to the consolidation of SSW as of January 24, 2014. In addition, the accounting for
the business combination with SSW requires a remeasurement of the Group’s previously held interest in
SSW to its fair value which results in a gain of E 3.5 mn. More information on the consolidation of SSW is
provided in the notes 02 and 07.
Income and expenses due to personnel cost related to restructuring
In April 2012, the Group ceased all activities at the wafer production site in Hikari, Japan and in August
2012, the Group closed one out of the two wafer production plants in Portland, United States. In addition,
the Group entered into an obligation based on the restructuring plan ‘‘300G’’ in Germany in December
2012 which affected the wafer production sites in Burghausen and Freiberg. The restructuring in Hikari
resulted in an income of E 3.0 mn in 2012 which represents the shortfall of actual cost for severance and
pensions compared to the corresponding estimate in the preceding year when the Hikari closure was
announced. In 2012, the closure of the plant in Portland resulted in termination benefits of A 6.6 mn and
charges of A 5.0 mn were recognized for the 300G plan which covered benefits for 85 employees in
Germany.
The A 2.8 mn of personnel cost related to restructuring in the year 2013 represent termination benefit
obligations based on an obligation at the wafer manufacturing facility in Freiberg.
F-36
Wind-down cost in Hikari and Portland
In the year 2012, expenses of A 5.1 mn were recorded for write-downs of supplies, consumables and spare
parts, an onerous long-term supply agreement and decommission cost in Hikari. In Portland, A 2.7 mn were
recorded for decommission cost in the same year.
Additional A 1.7 mn have been recorded to cover an onerous long-term supply agreement in Hikari in the
year 2013.
Impairment of property, plant and equipment
In the year 2014, an impairment of A 4.6 mn was recorded on an abandoned property. This property was
not in a saleable condition until the financial year 2014. Based on current management expectation the fair
value less cost to sell is only an insignificant amount. Further, machinery and equipment with a carrying
amount of A 4.3 mn has been impaired in the year 2014 because of cash flows expected to be negative.
In the year 2013, an impairment of A 22.3 mn was recorded for property, plant and equipment related to a
vacated building which was not intended to be used. Due to the fact that the asset cannot be reasonably
leased or sold to a third party a fair value of zero was allocated to the building. In addition to that,
management expected the future cash flows of a product line to be negative. The respective machinery and
equipment amounting to A 12.5 mn has been impaired.
The impairment recorded in the year 2012 refers to machinery and equipment for research and
development purposes, which management decided to cease. There has been a fair value amounting to
zero for the machinery and equipment.
Depreciation and amortization expense and Personnel expense
Depreciation and amortization expense amount to A 140.3 mn in 2014, A 87.3 mn in 2013, and A 90.3 mn in
2012 respectively.
Personnel expenses amount to A 268.8 mn in 2014, A 237.7 mn in 2013, and A 291.6 mn in 2012 respectively.
02
Joint Venture
As noted under ‘‘Changes in consolidation’’, the Group held a 50% interest in SSW until January 24, 2014.
SSW is structured as a separate vehicle and the Group has a residual interest in the net assets of SSW.
Accordingly, the Group had classified its interest in SSW as a joint venture.
According to a long-term supply agreement between the Group and SSW, the Group purchased a defined
volume of wafers manufactured by SSW which the Group then sells to its customers and, as contractually
agreed with SSW, kept a margin. This long-term supply agreement has a take-or-pay commitment and
ensures capacity utilization at SSW.
In addition to the purchase of wafers, the Group realized license fees coming from a license granted to
SSW for the production technology.
Moreover, the Group provided interest-bearing shareholder loans to SSW which also granted the Group
the right to convert all loans which existed as of December 31, 2013 into equity (call option). The call
options had differing exercise periods, with the longest running until March 31, 2016. In the course of
acquiring the majority in SSW, all exercise periods were aligned to December 31, 2016. The existing
options were not exercisable as at December 31, 2013 and 2014. The fair value of each option was zero at
each of the balance sheet dates.
The following table summarizes the financial information of SSW as included in its separate financial
statements as of December 31, 2013:
In EUR millions
As of
December 31,
2013
As of
December 31,
2013
Non-current assets . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . .
Other current assets . . . . . . . . . . . .
324.0
27.1
37.4
Non-current financial liabilities . . . .
Other non-current liabilities . . . . . . .
Current financial liabilities . . . . . . . .
342.0
2.8
60.7
Total assets . . . . . . . . . . . . . . . . . . .
388.5
Other current liabilities . . . . . . . . . .
24.5
Total liabilities . . . . . . . . . . . . . . . .
429.9
F-37
Reconciliation of the summarized financial information to the carrying amount of the interest in SSW as at
December 31, 2013:
In EUR millions
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
388.5
429.9
Net assets (100%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41.4
Group’s share of net assets (50%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20.7
Since SSW’s equity was negative at the end of 2013, the amount recorded in the Group’s statement of
financial position to reflect the investment in SSW at equity was zero.
Before acquiring the majority share of SSW, the joint venture had the following income and expenses:
January
2014
In EUR millions
Sales . . . . . . . . . . . . . . . . . . .
Operating loss . . . . . . . . . . . .
Depreciation and amortization
Interest income . . . . . . . . . . .
Interest expense . . . . . . . . . . .
Income tax . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . .
Other comprehensive income .
Total comprehensive income . .
Dividend payout . . . . . . . . . . .
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12.6
(5.9)
8.9
—
1.2
—
(7.0)
—
(7.0)
—
For the Year
Ended
December 31,
2013
2012
193.9
(68.7)
109.9
—
15.6
—
(84.3)
(1.3)
(85.6)
—
237.1
(36.5)
107.8
—
17.4
—
(53.9)
3.7
(50.2)
—
The loss shown in the statement of profit or loss from investment in joint venture represents the Group’s
50% share in the loss of SSW while SSW was accounted for using the equity method. The reconciliation of
the carrying amounts in the statement of financial position to the loss from investment in joint venture
prior to the Group’s acquisition of the majority in SSW in January 2014 was as follows:
In EUR millions
January 1, 2012 . . . . . . . . . . . . . . . . . . .
Accounting using the equity method . .
Additional loan . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . .
Effect of movements in exchange rates
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December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 1, 2013 . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . .
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Investment
in joint
venture
Loans to
joint
venture
44.9
(26.6)
—
—
3.9
130.0
—
29.9
5.6
4.7
174.9
(26.6)
29.9
5.6
8.6
22.2
170.2
192.4
22.2
(21.3)
—
(0.9)
170.2
(21.2)
6.0
(12.4)
192.4
(42.5)
6.0
(13.3)
Total
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
142.6
142.6
January 1, 2014 . . .
Accounting using
Remeasurement .
Consolidation . .
.
.
.
.
—
—
—
—
142.6
(3.5)
3.5
(142.6)
142.6
(3.5)
3.5
(142.6)
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
...
the
...
...
...........
equity method
...........
...........
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F-38
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—
—
03
Interest Income and Expense and Other Financial Expenses
In EUR millions
For the Year Ended
December 31,
2014
2013
2012
Net income from interest
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.6
(2.0)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.4)
Other financial expense
Interest accredition on provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sundry financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4
5.9
(0.3) (0.6)
6.1
5.3
(7.5) (7.9) (6.5)
1.8
9.5
7.5
(0.6) (11.1) (6.7)
(6.3)
(9.5) (5.7)
Interest income and expense
In the years 2014, 2013 and 2012, interest income on amounts due from Wacker Chemie AG was A 0.1 mn,
A 0.3 mn and A 0.3 mn respectively. The remaining interest was primarily due to loans granted to SSW.
Other financial expense
The interest on interest-bearing provisions includes net interest on the net defined benefit liability.
Other financial income and other financial expenses primarily result from exchange-rate effects relating to
loans denominated in a foreign currency and the respective currency hedges.
04
Income Taxes
Income taxes are calculated on the basis of applicable or anticipated tax rates according to the tax laws in
the individual countries as of the realization date. These tax rates are generally based on the legal statutes
valid or adopted as of the balance sheet date.
In Germany, prevailing tax rates include a corporate income tax, a solidarity surcharge on corporate
income tax, and a trade income tax that varies depending on the municipality in which a company is
located.
For the Year Ended
December 31,
2014
2013
2012
Tax rates in Germany
Weighted average trade income tax rate in Germany . . . .
Corporate income tax rate in Germany . . . . . . . . . . . . . .
Solidarity surcharge on corporate income tax in Germany
Income tax rate for Siltronic AG in Germany . . . . . . . . .
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12.3% 12.3% 11.6%
15.0% 15.0% 15.0%
5.5% 5.5% 5.5%
28.2% 28.2% 27.5%
Due to the PLTA which was in place from January 1, 2009 to December 31, 2014 with Wacker-Chemie
Dritte Venture GmbH, Siltronic AG was part of a fiscal unity with Wacker Chemie AG in Germany. In
December 2014, the parties agreed to cancel the PLTA with effect of January 1, 2015.
As a result of the fiscal unity, the Company was not a separate taxpayer and did not retain any tax loss
carryforwards. Following the termination of the PLTA, the Company is a separate tax payer. As mentioned
in the significant accounting policies for deferred tax asset, for purposes of these consolidated financial
statements, the Company reports German income taxes as if it had been a separate tax payer.
Profits generated by foreign subsidiaries are taxed in the respective countries at the relevant local and
national tax rates. The income tax rates for the foreign subsidiaries companies are within a range from 0%
to 38.8%.
Deferred taxes on undistributed profits of subsidiaries were recognized only if distribution is planned. The
amount of A 53.9 mn (2013: A 68.4 mn, 2012: A 39.7 mn) is available for distribution.
The tax expense reported for the financial years 2014, 2013 and 2012 was A 2.2 mn, A 10.2 mn and A 6.2 mn,
respectively. Applying the German tax rate on the loss before tax would result in tax benefits of A 7.0 mn,
F-39
A 27.9 mn and A 25.3 mn. The differences between the expected tax benefit and the actual tax expense of
A 9.2 mn, A 38.1 mn and A 31.5 mn were primarily caused by the loss history of the Company, the
impairment of deferred tax benefits at Siltronic Japan Corp. and Siltronic Corp. and by effects from
non-deductible expenses.
Income tax comprises current income tax for prior years with an amount of A 0.4 mn in the year 2014 and
A 0.1 mn in the year 2013. In the year 2012, a tax expense for prior years with an amount of A 0.4 mn was
recorded.
In EUR millions
For the Years Ended
December 31,
2014
2013
2012
Current taxes, Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current taxes, foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.2
(5.2)
(5.0)
—
(7.5)
(7.5)
—
(7.0)
(7.0)
Deferred taxes, Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes, foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
2.8
2.8
—
(2.7)
(2.7)
—
0.8
0.8
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.2)
(10.2)
(6.2)
Reconciliation of effective tax rate
Loss before taxes . . . . . . . . . . . . . . . . . . . . . . .
Income tax rate for Siltronic AG . . . . . . . . . . . .
Expected tax benefit . . . . . . . . . . . . . . . . . . . . .
Variance in tax rate . . . . . . . . . . . . . . . . . . . . .
Effect of non-deductible expenses . . . . . . . . . . .
Effect of tax-free income . . . . . . . . . . . . . . . . .
Taxes relating to other periods (current earnings)
Effect due to unrecognized deferred tax assets . .
Other variances . . . . . . . . . . . . . . . . . . . . . . . .
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . .
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.
.
(24.8)
28.2%
7.0
(5.3)
(1.5)
4.7
0.4
(9.2)
1.7
(2.2)
(8.9)%
(99.1)
(84.4)
28.2%
27.5%
27.9
23.2
(10.5)
(6.8)
(4.2)
(1.1)
3.4
0.4
0.1
(0.4)
(26.9)
(21.4)
—
(0.1)
(10.2)
(6.2)
(10.3)% (7.3)%
Deferred tax assets are recognized only if it is assumed that the tax benefits will be realized. The following
table shows the allocation of deferred taxes to the assets and liabilities:
As of Dec. 31,
2014 deferred tax
assets liabilities
In EUR millions
Current assets . . . . . . . . . . . .
Provision for pensions . . . . . . .
Other provisions . . . . . . . . . . .
Liabilities . . . . . . . . . . . . . . . .
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.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets shown in balance sheet . . . . . .
As of Dec. 31,
2013 deferred tax
assets liabilities
As of Dec. 31,
2012 deferred tax
assets liabilities
0.5
3.5
1.8
1.3
—
1.6
—
1.7
1.6
—
—
—
0.6
1.5
1.1
0.7
0.1
—
—
1.7
—
—
—
—
0.7
2.6
1.3
—
1.3
1.2
—
1.7
—
—
—
—
8.7
(1.6)
3.3
(1.6)
4.0
—
1.7
—
7.1
—
1.7
—
7.1
1.7
4.0
1.7
7.1
1.7
A netting of deferred tax assets and deferred tax liabilities is performed only in case future benefits and
obligations relate to the same taxable entity and to the same tax authority.
F-40
Changes of deferred tax assets and liabilities are recorded as an income or expense. The existing tax loss
carry forward can be utilized as follows:
For the Years ended
December 31,
2014
2013
2012
In EUR millions
Within
Within
Within
Within
Within
1
2
3
4
5
year
years
years
years
years
..
..
..
..
or
....
....
....
....
later
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.
.
.
.
—
—
—
—
66.1
—
—
—
—
53.5
—
—
—
—
65.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66.1
53.5
65.4
Of which loss carryforwards expected not to be realizable . . . . . . . . . . . . . . . . . . .
Of which loss carryforwards expected to be realizable . . . . . . . . . . . . . . . . . . . . . .
66.1
—
53.5
—
65.4
—
In each year presented, the tax loss carry forward are from entities outside Germany.
Deferred taxes are not recognized on loss carryforward that are not realizable. An amount of A 25.1 mn
would have resulted from such recognition in the year 2014, A 20.3 mn in the year 2013 and A 26.5 mn in
the year 2012.
As of December 31, 2014, no deferred tax assets were recognized for tax-deductible temporary differences
of A 402.5 mn. As of December 31, 2013 and 2012, no deferred tax assets were recognized for
tax-deductible temporary differences of A 124.2 mn and A 149.2 mn respectively. For the financial years
2014, 2013 and 2012, no deferred tax assets were recorded on these temporary differences and loss
carryforwards due to the loss history of the Company.
05
Development of Intangible Assets
Goodwill
In EUR millions
Cost
January 1, 2014 . . . . . . . . . . . . . . . . . . .
Acquisition through business combination
Additions . . . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . . . .
Effect of movements in exchange rates . .
—
9.6
—
—
—
0.9
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20.5
10.5
.
.
.
.
—
—
—
—
—
1.8
—
0.1
38.2 38.2
0.8
2.6
(0.1) (0.1)
1.1
1.2
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
1.9
40.0
41.9
Carrying amount as of December 31, 2014 . . . . . . . . . . . . . . . . . .
20.5
8.6
0.6
29.7
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.
.
.
.
.
.
.
.
.
.
.
.
Total
—
20.5
—
—
—
—
.
.
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.
.
.
.
Other
.
.
.
.
.
.
Amortization
January 1, 2014 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
.
.
.
.
.
.
Customer
relationship
.
.
.
.
38.7 38.7
0.2 30.3
0.2
0.2
(0.1) (0.1)
0.5
0.5
1.1
2.0
40.6
71.6
The goodwill and the customer relationship acquired through business combination are due to the
consolidation of SSW. Further information is provided in note 07.
The customer relationship is amortized based on management expectation of the term of the relationship.
The amortization follows the straight-line method over the expected term of the customer relationship.
For the purpose of impairment testing, goodwill has been allocated to the Group’s Cash Generating Unit
(CGU) ‘‘300 mm’’. The recoverable amount of this CGU was based on its value in use, determined by
discounting the future cash flows to be generated from the continuing use of the CGU. The key
assumptions used for calculating the recoverable amount are a long-term EBITDA margin based on the
five year plan, a remaining useful life of the leading asset allocated to the CGU of 24 years and a discount
rate of 10.7% before tax. The discount rate was derived from a post-tax measure estimated on the
F-41
historical industry average weighted-average cost of capital, with a possible debt leveraging of 10% at a
market interest premium of 6.8%.
The EBITDA for the first five years was derived from the CGU’s five year plan which assumes an
increasing EBITDA based on increasing sales and on increasing EBITDA margins. The presumption for
the following years until the end of the 24th year was EBITDA remains constant. No growth rate was
applied.
The calculation of the recoverable amount is sensitive to its assumptions as follows:
Long-term EBITDA margin: There is a possibility of lower than forecasted EBITDA margins, which may
occur due to an overcapacity of the worldwide wafer supply industry. A drop in EBITDA margin by 10%
compared to the forecasted margin would result in impairment.
Useful life of the leading asset: There is the possibility of a shorter than forecasted remaining useful life of
the leading asset in case the manufacturing infrastructure becomes obsolete earlier than anticipated.
Assuming a remaining useful life of 17 years instead of 24 years would result in impairment.
Discount rate: There is the possibility of higher than forecasted weighted-average cost of capital. A rise in
the discount rate of 1.5% would result in impairment.
Total
In EUR millions
Cost
January 1, 2013 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
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.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
54.6
0.1
(13.1)
0.1
(3.0)
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization
January 1, 2013 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
.
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.
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.
.
.
.
.
.
.
.
38.7
.
.
.
.
53.4
0.8
(13.0)
(3.0)
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38.2
Carrying amount as of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5
Total
In EUR millions
Cost
January 1, 2012 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
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.
.
.
.
.
.
56.3
0.1
(0.7)
0.9
(2.0)
December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54.6
Amortization
January 1, 2012 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . .
54.5
1.3
(0.3)
(2.1)
.
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.
December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53.4
Carrying amount as of December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Other intangible assets primarily comprise industrial property rights and similar rights acquired at cost
from third parties, e.g. software licenses.
F-42
06
Development of Property, Plant and Equipment
The changes in consolidation relates to the acquisition of the majority share in SSW in the year 2014. As a
result of the consolidation, SSW’s assets are reported in the Group’s consolidated financial statements.
Further information on the consolidation of SSW is provided in note 07.
Land,
Machinery and Other equipment,
Assets
buildings and
technical
factory and office
under
similar rights
equipment
equipment
construction
In EUR millions
Cost
January 1, 2014 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
Acquisition through business
combination . . . . . . . . . . . . . . . . . .
.
.
.
.
532.5
0.1
(0.2)
0.1
1,983.2
15.3
(20.6)
10.2
.
.
116.3
29.1
194.2
83.9
December 31, 2014 . . . . . . . . . . . . . . . . .
677.9
Depreciation
January 1, 2014 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
11.7
22.3
(0.2)
(12.4)
2,652.7
40.5
(25.2)
(0.5)
1.6
1.6
3.9
0.5
316.0
115.1
2,266.2
128.7
25.8
3,098.6
424.0
12.9
4.6
(0.2)
—
16.3
1,778.5
120.2
3.8
(20.4)
1.9
67.0
115.7
4.6
0.5
(4.1)
—
1.3
2.2
—
—
—
(1.9)
—
2,320.4
137.7
8.9
(24.7)
—
84.6
December 31, 2014 . . . . . . . . . . . . . . . . .
457.6
1,951.0
118.0
0.3
2,526.9
Carrying amount as of December 31, 2014
220.3
315.2
10.7
25.5
571.7
.
.
.
.
.
.
125.3
2.8
(4.2)
1.6
Total
In the year 2013, the development was as follows:
Land,
Assets
buildings and
technical
factory and office
under
similar rights
equipment
equipment
construction
In EUR millions
Cost
January 1, 2013 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
.
.
.
.
.
Total
546.0
1.7
(0.6)
28.0
(42.6)
2,113.6
13.2
(116.0)
17.5
(45.1)
127.3
2.2
(4.6)
2.3
(1.9)
47.1
13.3
(0.4)
(47.9)
(0.4)
2,834.0
30.4
(121.6)
(0.1)
(90.0)
December 31, 2013 . . . . . . . . . . . . . . . . .
532.5
1,983.2
125.3
11.7
2,652.7
Depreciation
January 1, 2013 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
431.5
9.0
22.3
(0.4)
0.6
(39.0)
1,853.8
73.2
10.6
(115.6)
(0.6)
(42.9)
117.8
4.3
—
(4.6)
—
(1.8)
0.7
—
1.9
(0.3)
—
(0.1)
2,403.8
86.5
34.8
(120.9)
—
(83.8)
December 31, 2013 . . . . . . . . . . . . . . . . .
424.0
1,778.5
115.7
2.2
2,320.4
108.5
204.7
9.6
9.5
332.3
.
.
.
.
.
.
F-43
In the year 2012, the development was as follows:
Land,
Assets
buildings and
technical
factory and office
under
similar rights
equipment
equipment
construction
In EUR millions
Total
Cost
January 1, 2012 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
December 31, 2012 . . . . . . . . . . . . . . . .
.
.
.
.
.
.
560.0
7.2
(1.2)
1.1
(21.1)
546.0
2,362.5
26.3
(294.1)
36.0
(17.1)
2,113.6
126.6
1.6
(2.5)
1.8
(0.2)
127.3
49.6
37.5
(0.1)
(39.8)
(0.1)
47.1
3,098.7
72.6
(297.9)
(0.9)
(38.5)
2,834.0
Depreciation
January 1, 2012 . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . .
Transfers . . . . . . . . . . . . . . . . . . . . . .
December 31, 2012 . . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
444.8
9.3
—
(1.2)
—
(21.4)
431.5
2,086.8
75.8
1.6
(293.3)
—
(17.1)
1,853.8
116.6
3.9
—
(2.5)
—
(0.2)
117.8
—
—
0.9
(0.1)
—
(0.1)
0.7
2,648.2
89.0
2.5
(297.1)
—
(38.8)
2,403.8
114.5
259.8
46.4
430.2
9.5
For information on impairment losses reference is made to note 01.
07
Acquisition of SSW
Consolidation of SSW
The majority stake in SSW was acquired by means of a capital increase of A 86.5 mn. Prior to the
acquisition, the investment in SSW was accounted for using the equity method. When increasing our total
interest to 78%, the Group takes control over SSW, a leading edge 300 mm wafer site with a current
monthly production capacity of approximately 330,000 wafers.
At the time of the initial consolidation on January 24, 2014 the previously held equity investment was
recorded at a value of zero due to the cumulative net losses of SSW. Further losses from this investment
amounting to A24.2 mn were offset with a shareholder loan classified as a net investment.
As a result of the acquisition, foreign currency translation adjustments previously recognized directly in
equity were realized in the statement of profit or loss. This resulted in a non-cash gain of A 17.6 mn shown
under other operating income. The acquisition of SSW was recorded as step acquisition under which the
transferred assets and liabilities are remeasured to their fair values as of the acquisition date.
The existing contractual relationships between the Group and SSW were recognized at fair value. The
Group had trade receivables and other assets of A 6.1 mn, shareholder loan of A 142.6 mn, prepayments of
A 8.6 mn and trade payables of A 5.1 mn.
The Group incurred acquisition-related costs of A 0.1 mn on legal and similar fees. These costs have been
included in the line item administrative expenses.
Identifiable assets acquired and liabilities assumed
The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the
date of the acquisition.
In EUR millions
Intangible assets . . . . . . . . . . . . . . .
Property, plant and equipment . . . . .
Inventories . . . . . . . . . . . . . . . . . . .
Trade receivables, other assets . . . . .
Cash and cash equivalents . . . . . . . .
Loans and borrowings . . . . . . . . . . .
Trade liabilities, other payables . . . . .
Total identifiable net assets acquired .
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F-44
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9.8
316.1
32.1
6.9
26.2
(228.3)
(20.0)
142.8
Measurement of fair values
Intangible assets reflect an existing framework contract including the ongoing non-contractual customer
relationship. The multi-period excess earnings method was applied.
The valuation model used for property, plant and equipment considered market prices for similar assets
when they are available, and depreciated replacement cost when appropriate. Depreciated replacement
cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.
The fair value of inventories was determined using the market comparison technique. The estimated
selling price in the ordinary course of business less the estimated costs of completion and sale, and a
reasonable profit margin based on the effort required to complete and sell the inventories.
Goodwill
Goodwill arising from the acquisition has been recognized as follows:
In EUR millions
Consideration transferred (payment of capital increase) . . . . . . . . . . . . .
Consideration transferred (fair value of pre-existing relationship in SSW)
Total identifiable net assets (without capital increase) . . . . . . . . . . . . . .
Cash resulting from capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interests, based on their proportionate interest in the
recognized amounts of the assets and liabilities of SSW . . . . . . . . . . .
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.
86.5
150.2
(142.8)
(86.5)
...........
13.1
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20.5
The net cash acquired may be reconciled with the consideration transferred as follows:
In EUR millions
Consideration transferred (payment of capital increase) . . . . . . . . . . . . . . . . . . . . . . . .
Cash resulting from capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86.5
(86.5)
26.2
Acquisition of subsidiary, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26.2
The remeasurement to fair value of the Group’s existing loan in SSW resulted in a gain of A 3.5 mn. This
amount has been included in other operating income. The goodwill is attributable mainly to the skills of
the work force and synergies expected to be achieved from the integration into our existing business in
Singapore. None of the goodwill is expected to be deductible for tax purposes.
In the period from January 24, 2014 through December 31, 2014, SSW posted sales of A 153.0 mn and net
loss of approximately A 49.0 mn. If SSW had been consolidated starting January 1, 2014 the consolidated
revenue for the Group would have amounted to approximately A 853 mn and the net loss of the Group
would have amounted to approximately A 34 mn.
Non-controlling interests
After obtaining control of SSW the non-controlling interest (NCI) of 22% are held by Samsung. The
proportion of ownership equals the voting rights.
F-45
The summarized financial information of SSW for the period January 24 until December 31, 2014 is
following:
In EUR millions
Non-current assets . . .
Current assets . . . . . .
Non-current liabilities .
Current liabilities . . . .
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292.1
75.6
(310.0)
(45.5)
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NCI percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.2
22%
Carrying amount of NCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.7
For the period January 24, 2014 to December 31, 2014
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
153.0
(48.9)
—
Total comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss allocated to NCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(48.9)
(10.8)
For the period January 24, 2014 to December 31, 2014
Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79.3
(10.8)
(75.6)
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7.1)
There were no dividends paid to non-controlling interests.
08
Development of Financial Assets
Development of financial assets
Investments
in joint
venture
Loans to
joint
venture
Securities
Total
.
.
.
.
.
—
—
—
—
—
142.6
3.4
(3.5)
(142.6)
0.1
1.4
—
—
—
—
144.0
3.4
(3.5)
(142.6)
0.1
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
1.4
1.4
Amortization
January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of movements in exchange rates . . . . . . . . . . . . . . . .
—
—
—
—
1.4
—
1.4
—
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
1.4
1.4
Carrying amount as of December 31, 2014 . . . . . . . . . . . . . . .
—
—
—
—
In EUR millions
Cost
January 1, 2014 . . . . . . . . . . . . . . . . . .
Revaluation . . . . . . . . . . . . . . . . . . . .
Accounting using the equity method . . .
Change due to consolidation . . . . . . . .
Effect of movements in exchange rates .
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F-46
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In EUR millions
Cost
January 1, 2013 . . . . . . . . . . . . . . . . .
Revaluation . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . .
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Investment
in joint
venture
Loans to
joint
venture*
Securities
Total
22.2
—
(21.3)
—
(0.9)
170.2
—
(21.2)
6.0
(12.4)
1.8
—
—
—
(0.4)
194.2
—
(42.5)
6.0
(13.7)
1.4
144.0
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
142.6
Amortization
January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of movements in exchange rates . . . . . . . . . . . . . . . . .
—
—
—
—
1.8
(0.4)
1.8
(0.4)
December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
1.4
1.4
Carrying amount as of December 31, 2013 . . . . . . . . . . . . . . . .
—
142.6
—
142.6
*
Includes an amount of A 49.2 mn classified as a net investment.
In EUR millions
Cost
January 1, 2012 . . . . . . . . . . . . . . . . .
Additional loan . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . .
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December 31, 2012
January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A Effect of movements in exchange rates . . . . . . . . . . . . . . . . .
Carrying amount as of December 31, 2012 . . . . . . . . . . . . . . . .
09
Investment
in joint
venture
Loans to
joint
venture
Securities
Total
44.9
(26.6)
—
—
3.9
130.0
—
29.9
5.6
4.7
2.0
—
—
—
(0.2)
176.9
(26.6)
29.9
5.6
8.4
22.2
170.2
1.8
194.2
—
—
—
—
2.0
(0.2)
2.0
(0.2)
—
—
1.8
1.8
22.2
170.2
—
192.4
Inventories
For the year ended
December 31,
2014
2013
2012
In EUR millions
Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished and unfinished products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade wafers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56.5
81.9
—
31.0
53.2
2.3
38.3
54.8
2.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
138.4
86.5
95.5
Of which recorded at net realizable value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49.4
32.0
23.1
The increase from the year 2013 to the year 2014 in raw materials and supplies as well as in finished and
unfinished goods is due to the consolidation of SSW.
F-47
10
Trade Receivables, Other Assets and Income Tax Receivables
As of Dec. 31, 2014
As of Dec. 31, 2013
As of Dec. 31, 2012
of which of which
of which of which
of which of which
Total non-current current Total non-current current Total non-current current
In EUR millions
Trade receivables . . . . . . . . . . 111.1
Advance payments to SSW
Derivative financial
instruments . . . . . . . . .
Deferred charges . . . . . . .
Investment fund shares(1) . .
Government grants . . . . . .
Other tax receivables . . . .
Sundry other assets . . . . . .
—
111.1
98.1
—
98.1
105.9
—
105.9
.
—
—
—
8.6
8.6
—
—
—
—
.
.
.
.
.
.
4.2
1.8
—
3.2
1.1
13.2
0.3
—
—
—
—
—
3.9
1.8
—
3.2
1.1
13.2
15.8
1.2
—
3.4
0.3
14.6
2.4
—
—
—
—
—
13.4
1.2
—
3.4
0.3
14.6
8.1
1.9
0.3
8.7
1.0
11.3
2.9
—
0.3
—
—
—
5.2
1.9
—
8.7
1.0
11.3
Other assets . . . . . . . . . . . . .
of which maturity > 5 years .
23.5
—
0.3
—
23.2
—
43.9
—
11.0
—
32.9
—
31.3
—
3.2
—
28.1
—
of which maturity > 5 years .
1.6
—
0.2
—
1.4
—
0.6
—
0.3
—
0.3
—
1.7
—
0.3
—
1.4
—
Receivables are measured at costs which correspond to their market values. If not covered by insurance or
advance payments received, default risks are taken into account with valuation allowances. Sundry other
assets include advance payments to Wacker pension funds of an amount of A 9.5 mn at each year-end 2014
and 2013. End of the year 2012, an amount of A 8.5 mn was included.
The following table shows the aging of receivables:
In EUR millions
Of which no
valuation
allowance
and not
overdue
Carrying
amount
overdue
< 30 days
Of which
overdue no
valuation
allowance
overdue 31
to 45 days
overdue
> 45 days
Of which
overdue
and
valuation
allowance
December 31, 2014
Trade receivables . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . .
111.1
23.5
99.6
23.5
11.1
—
0.1
—
—
—
0.3
—
Total . . . . . . . . . . . . . . . . . . . . . . .
134.6
123.1
11.1
0.1
—
0.3
December 31, 2013
Other assets . . . . . . . . . . . . . . . .
98.1
43.9
84.3
43.9
10.7
—
—
—
—
—
3.1
—
Total . . . . . . . . . . . . . . . . . . . . . . .
142.0
128.2
10.7
—
—
3.1
December 31, 2012
Other assets . . . . . . . . . . . . . . . .
105.9
31.3
86.1
31.3
14.0
—
2.9
—
—
—
2.9
—
Total . . . . . . . . . . . . . . . . . . . . . . .
137.2
117.4
14.0
2.9
—
2.9
The following table shows the development of valuation allowances on trade receivables during the
reporting periods (no valuations allowances have been recorded on other assets):
In EUR millions
As of January 1 . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . .
Effect of movement in exchange rates
.
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.
As of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014
2013
7.7
(3.4)
0.1
(2.1)
0.3
10.6
4.2
(2.0) (0.5)
1.4
8.0
(1.4) (0.5)
(0.9) (0.6)
2.6
7.7
2012
10.6
The maximum default risk is estimated to match the carrying amount of the receivables not covered by a
default insurance. The Group provides for default risk based on past experience and on the conditions
prevailing as of the period end.
F-48
11
Financial Receivables and Financial Liabilities
of which
Total non-current current
In EUR millions
of which
of which
Receivable from cash
pooling at Wacker
Chemie AG . . . . . . . . . .
Receivable from PLTA . . . .
—
—
—
—
— 271.5
— 100.5
—
—
271.5 149.7
100.5 108.4
—
—
149.7
108.4
Financial receivables . . . . . . .
—
—
— 372.0
—
372.0 258.1
—
258.1
Financial liabilities to
Wacker Chemie AG . . . . 176.0
Other financial liabilities to
the Wacker Group . . . . .
0.1
—
176.0
—
—
—
—
—
—
—
0.1
—
—
—
—
—
—
176.1
35.8
—
35.8
176.0
—
—
—
—
—
—
—
—
—
—
—
—
—
Financial liabilities . . . . . . . . 211.9
35.8
176.0
—
—
—
—
—
—
Loan from Samsung . . . . . .
At the end of 2014, Wacker Chemie AG provided Siltronic AG with a credit facility of A 150.0 mn which
the Group drew and which increased the cash by the same amount. Additional A 26.0 mn result from a
negative balance under the cash pooling with Wacker Chemie AG. Long-term financial liabilities include a
shareholder loan including interest from non-controlling interests in the amount of A 35.8 mn which are
due in 2025.
No collateral exists for financial liabilities. Financial liabilities are not secured through liens or similar
rights.
12
Cash and Cash Equivalents
Deposits and cash on hand are measured at their notional amounts. The development of cash and cash
equivalents is shown in statement of cash flows.
13
Equity
The individual items of shareholders’ equity and its development are shown in Changes in Equity.
Subscribed capital
The subscribed capital of A 100.0 mn consists of 50.0 mn issued and outstanding shares with no par value.
In addition, a conditional capital exists of up to 50 mn or 25 mn unissued shares and has been authorized.
Capital reserve
The capital reserve consists of the premium on the issuance of shares, a benefit in kind and cumulated
transfers under the PLTA. The premium and benefit in kind amount to A 417.3 mn. In the years 2014, 2013
and 2012, Wacker-Chemie Dritte Venture GmbH absorbed losses due to the PLTA of A 15.5 mn,
A 100.5 mn and A 108.4 mn respectively. Further losses from 2009 until 2011 amounted to A 344.1 mn.
These represented cash injections into the capital reserve. Siltronic AG and Wacker-Chemie Dritte
Venture GmbH agreed to cancel the PLTA effective January 1, 2015.
In the year 2014 the Company entered into a labor support agreement with Wacker Chemie AG. The
respective payment amounting to A 39.0 mn has been treated as a transaction with shareholders and
presented in the capital reserve. For further details reference is made to note 22.
In prior consolidated financial statements of the Group the losses absorbed under the PLTA were not
recorded in the line item ‘‘capital reserve’’ but under ‘‘accumulated deficit’’. The amounts reclassified have
been A 553.0 mn as of December 31, 2013 and A 452.5 mn as of December 31, 2012. Hence, the capital
reserves have increased by these amounts, whereas accumulated deficit has decreased by these amounts
accordingly.
F-49
Accumulated deficit
Accumulated deficit comprises the cumulative net losses for the year and earnings generated in the past by
the Group, net of dividend payouts.
At the general meeting of the shareholders on March 5, 2014 the Company declared a dividend of
A 269.5 mn. These amounts represent retained earnings from the periods before 2009, i.e. before the PLTA
was effective and the company was part of the German fiscal unity. Dividend distributions are based on the
equity available under German statutory accounting standards.
Management of capital
In managing its capital, the Company complies with the legal stipulations on capital maintenance. The
Company’s Articles of Association do not stipulate any capital requirements.
14
Provision for Pensions
There are various post-employment pension plans for Group employees, which depend on the legal,
economic and fiscal conditions prevailing in the relevant countries. These pension plans generally take into
account of employees’ service term and salary levels.
The Group operates both defined contribution and defined benefit plans. Defined contribution plans lead
to no further obligation on the part of the Group company beyond paying contributions. Pension
obligations result from defined benefit plans in the form of entitlements to pension benefits for eligible
active and former employees of the Siltronic Group and their surviving dependents.
German pension fund
In Germany the plans are administered by Pensionskasse der Wacker Chemie VVaG a pension fund, in
form of a regulated mutual insurance carrier legally separated from the Group.
Plan for employees until 2004—defined benefit plan
Employees who joined the Company prior to 2004 receive their pension based on a defined benefit
obligation, which is financed by payouts from Pensionskasse der Wacker Chemie VVaG, The Company is
ultimately responsible for the pension obligations. The pension is based on a certain percentage of the
contribution to the plan by the employer and the employee.
Plan for employees starting 2005—defined contribution plan
For employees in Germany who joined in 2005 or later, a basic pension plan award is granted by
Pensionskasse der Wacker Chemie VVaG. Their direct contribution-type benefits are financed by
employee and company contributions and comprise pensions, disability and survivor benefits. Additionally,
employees in Germany may also make voluntary payments to the ‘‘PK+’’ supplementary insurance fund of
Pensionskasse der Wacker Chemie VVaG. These plans both do not affect the determination of the pension
obligation because of their insurance-related characteristics and are thus classified as defined contribution
plans.
Benefits by direct commitments—defined benefit plan in Germany
In addition to the pension fund commitments, employees in Germany receive direct commitments in the
form of an additional pension. The additional pension insures salary elements above and beyond the
pension insurance contribution assessment ceiling. For employees who joined the company before end of
2004, a pension is granted and depends on the average salary earned during the period of employment with
the Group (career average plan).
For employees who joined the plan on or after January 1, 2005, the pension is based on a certain
percentage of the salary. It is not dependent on the average salary earned during the period of
employment.
The benefits may be drawn as a life-long pension or, in the case of commitments from 2005 onward, as a
lump sum. Employees and their surviving dependents are eligible to receive benefits.
F-50
Deferred compensation plan—defined benefit plan in Germany
Employees in Germany may elect to contribute to an employee-financed deferred compensation plan. This
plan enables employees to waive their portions of their future salary claims into pension benefits in the
form of a guaranteed investment contract. Contributions accrue interest according to the guaranteed rate
at either seven percent (1996 to 2001), six percent (2002 to 2010) or five percent (2011 to 2013). Plans
bearing seven percent or six percent interest may be drawn in the form of either a pension or a lump sum.
Plans bearing five percent interest are paid out exclusively in lump-sum form.
United States
Various pension plans are available for employees of foreign subsidiaries, subject to the statutory
provisions applicable in the respective countries. With the exception of the US pension plans, these
pension plans are not significant to the Group.
In the United States, defined benefit plans exist for employees of Siltronic Corporation, Portland who have
entered the company before end of 2003. Both plans were closed for new entrants after December 31,
2003. Retirement benefits are paid a monthly starting at age 65 and are based on the last average salary
paid. Special provisions apply to early retirement age 55 depending on the employee’s years of service.
Postretirement health care and severance benefits are also provided under eligible employees. Hires after
2003 only receive defined contribution benefits.
The present value of defined benefit obligations reconcile with the provisions recognized on the statement
of financial position as follows:
In EUR millions
Present value of funded
defined benefit
obligations . . . . . . . .
Fair value of plan assets
Funded status . . . . . . .
Present value of
unfunded defined
benefit obligations . .
Provisions for pensions
and similar
obligations . . . . . . . .
Germany Foreign
Total
Germany Foreign
Total
Germany Foreign
Total
498.4
350.3
121.6
83.5
620.0
433.8
371.0
315.7
89.3
67.8
460.3
383.5
377.2
296.6
101.0
66.5
478.2
363.1
148.1
38.1
186.2
55.3
21.5
76.8
80.6
34.5
115.1
136.5
5.4
141.9
104.2
4.0
108.2
106.9
4.7
111.6
284.6
43.5
328.1
159.5
25.5
185.0
187.5
39.2
226.7
Changes in the net liability of defined benefit obligations in the years 2014, 2013 and 2012 have been as
follows:
In EUR millions
Projected
benefit
plan obligation
Fair value of
plan assets
Total
568.5
14.6
22.7
383.5
—
15.2
185.0
14.6
7.5
As of January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurements
Return on plan assets in excess of amounts recognized in interest
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains/losses from changes in demographic assumptions . . . . . . . .
Actuarial losses from changes in financial assumptions . . . . . . . . .
Gains/losses from changes in experience-based assumptions . . . . .
Effects of exchange-rate differences . . . . . . . . . . . . . . . . . . . . . . . .
Contributions by employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions by employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers/settlements/other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
4.4
155.3
(6.9)
13.8
—
2.3
(12.3)
(0.5)
As of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
761.9
F-51
17.3
—
—
—
9.1
16.3
2.3
(9.9)
—
433.8
(17.3)
4.4
155.3
(6.9)
4.7
(16.3)
—
(2.4)
(0.5)
328.1
Projected
benefit
plan obligation
Fair value of
plan assets
Total
As of January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurements
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial gains from changes in financial assumptions . . . . . . . . .
Transfers/settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
589.8
15.8
20.8
363.1
—
12.9
226.7
15.8
7.9
As of December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
568.5
383.5
185.0
Projected
benefit
plan obligation
Fair value of
plan assets
Total
As of January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past service cost and effects from settlements and curtailments . .
Remeasurements
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial losses from changes in financial assumptions . . . . . . . . .
Transfers/settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
490.9
13.3
21.8
(15.4)
340.1
—
15.3
(9.4)
150.8
13.3
6.5
(6.0)
—
93.9
(2.3)
(2.4)
—
2.4
(10.6)
(1.8)
15.8
—
—
(1.3)
8.3
2.4
(8.1)
—
(15.8)
93.9
(2.3)
(1.1)
(8.3)
—
(2.5)
(1.8)
As of December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
589.8
In EUR millions
In EUR millions
—
(39.3)
(4.7)
(4.0)
—
2.3
(11.1)
(1.1)
6.5
—
—
(2.8)
10.4
2.3
(8.9)
—
363.1
(6.5)
(39.3)
(4.7)
(1.2)
(10.4)
—
(2.2)
(1.1)
226.7
Assumptions
The pension obligations are calculated by taking account of company-specific and country specific
biometric calculation principles and parameters. The calculations are based on actuarial valuations that
factor in the following parameters:
2014
Germany
Discount rate . . . . . . . . . . . . . . . . . . . . . . . .
Salary growth rate . . . . . . . . . . . . . . . . . . . .
Pension growth rate . . . . . . . . . . . . . . . . . . .
2.3%
2.5%
1.8%
USA
3.8%
2,0% - 3,0%
—
2013
Germany USA
3.8%
3.0%
2.0%
4.8%
3.0%
—
2012
Germany USA
3.5%
3.0%
2.0%
4.0%
3.0%
—
Sensitivity Analysis
The following sensitivity analysis involves an adjustment of only one assumption with the other
assumptions remaining unchanged so that the sensitivity of each individual assumption can be observed in
isolation (ceteris paribus).
F-52
The following table shows the estimated changes in the present value of pension obligations resulting from
changes in the respective actuarial assumption
December 31, 2014
Effect on defined benefit
obligation
defined benefit
obligation in
EUR millions
change
Present value of pension obligations as of the reporting date
Present value of all pension obligations if
the discount rate decreases by 0.5% . . . . . . . . . . . . . . . .
salaries increase by 0.5% . . . . . . . . . . . . . . . . . . . . . . . .
salaries decrease by 0.5% . . . . . . . . . . . . . . . . . . . . . . . .
future pension increases are 0.25% lower . . . . . . . . . . . .
...............
762
.
.
.
.
.
.
.
692
842
771
753
783
742
787
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(9.2)%
10.6%
1.2%
(1.1)%
2.8%
(2.7)%
3.3%
The following table shows the estimated changes in the present value of pension obligations resulting from
changes in the basic actuarial assumptions as of the balance sheet date December 31, 2013:
December 31, 2013
Effect on defined
benefit obligation
defined benefit
obligation
change
in EUR millions
Present value of pension obligations as of the reporting date
Present value of all pension obligations if
the discount rate decreases by 0.5% . . . . . . . . . . . . . . . . .
salaries increase by 0.5% . . . . . . . . . . . . . . . . . . . . . . . . .
salaries decrease by 0.5% . . . . . . . . . . . . . . . . . . . . . . . .
future pension increases are 0.25% lower . . . . . . . . . . . . .
.............
569
.
.
.
.
.
.
.
520
624
576
562
583
555
585
.
.
.
.
.
.
.
.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
(8.5)%
9.7%
1.4%
(1.2)%
2.6%
(2.4)%
2.8%
Due to the first-time adoption of IAS 19 (revised 2011) in 2013 no reference data for 2012 exist.
Composition of plan assets
In Germany, the plan assets comprised of insurance policies issued by Pensionskasse der Wacker Chemie
VVaG. The insurance carrier invests in mutual funds holding equity and fixed-income securities, assetbacked notes, real estate and private equity funds. The remaining part of assets is retained for liquidity
purposes. The investment strategy follows the investment guideline provided by the executive board of the
pension fund. The plan assets of pension funds in the United States are generally invested in equities and
funds in accordance with the applicable investment guidelines.
The composition of plan assets for the Group is:
Market
Market
Market
price quoted No quote in
in an active
an active
in an active
an active
in an active
an active
market
market
Total
market
market
Total
market
market
Total
In EUR millions
Real estate . . . . . .
Loans and securities
with fixed interest
Shares and funds . .
Liquidity . . . . . . . .
.
—
59.9
59.9
—
55.2
55.2
—
48.2
48.2
.
.
.
158.6
62.7
—
105.6
29.4
17.6
264.2
92.1
17.6
99.0
103.0
—
97.0
14.1
15.2
196.0
117.1
15.2
96.5
97.3
—
98.2
13.9
9.0
194.7
111.2
9.0
Total plan assets . . . .
221.3
212.5
433.8
202.0
181.5
383.5
193.8
169.3
363.1
F-53
Risks
In addition to the actuarial risks, the risk connected with the defined benefit obligation relates in particular
to financial risks connected with plan assets. In Germany, substantial amounts of the defined benefit
obligation are covered by plan assets managed by the pension fund. The current and future relationship
between the asset allocation in its portfolio and our pension obligations are analyzed and projected as part
of an annual asset-liability study to determine the long-term return on plan assets. On that basis, the
pension fund defines a strategic target asset allocation, the required return and company contributions. All
capital investments are exposed to market price fluctuation risks. These risks may comprise changes in
interest rates, equity prices or exchange rates.
The pension obligations for German employees are partially financed through the Pensionskasse der
Wacker Chemie VVaG, supervised by the German Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht). The Group is required to make regular contributions to the fund. Due to
the low interest rate environment in recent years, the German Financial Supervisory Authority has
required the Pensionskasse der Wacker Chemie VVaG to calculate its pension liabilities using a lower
discount rate. This has, in turn, caused the Pensionskasse der Wacker Chemie VVaG to demand higher
contributions from the Group and its other members.
Actuarial risks arise in particular with the life expectancy of the beneficiaries and the guarantee rate of
return. The pension obligations include partly a guaranteed return on the contributions to the plan. In a
low interest rate environment there are risks of achieving these guaranteed returns, which is a major focus
of the pensions fund Pensionskasse der Wacker Chemie VVaG.
Financing of the pension plan
In the years 2014, 2013 and 2012 benefits in the amount of A 8.6 mn, A 7.9 mn and A 7.5 mn respectively
were paid into pension plans in Germany and A 3.7 mn, A 3.2 mn and A 3.1 mn respectively into pension
plans outside of Germany. Employer contributions to plan assets will amount to approximately A 9.3 mn in
the year 2015. The expected term of pension obligations as of December 31, 2014 was 21.5 years in
Germany and 15.8 years in the United States.
Projected payment periods for pensions
The following table shows the pensions benefits that the Group expects to pay from 2015-2019:
In EUR millions
2015
2016
2017
2018
2019
13.8
15.3
16.3
17.5
19.4
Composition of pension expenses by benefit plan
For the year ended
December 31,
2014
2013
2012
In EUR millions
Expenses due to defined benefit plans . . . .
Expenses due to defined contribution plans
Contributions to public pension schemes . .
Other pension expenses . . . . . . . . . . . . . .
Total retirement benefits . . . . . . . . . . . . . . .
15
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.
.
.
.
.
.
.
.
.
.
.
.
.
22.0
1.2
13.6
—
36.8
23.7
1.2
13.3
0.3
38.5
13.3
0.6
14.4
3.6
31.9
Other Provisions and Provision for Income Taxes
of which
of which
of which
In EUR millions
Personnel . . . . . . . . . . . .
Onerous contracts . . . . .
Environmental protection
Restructuring . . . . . . . . .
Sundry . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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.
.
.
.
.
.
.
.
.
.
.
. 29.1
. —
. 0.5
. 1.8
. 2.8
. 34.2
Provision for taxes . . . . . . . . . . .
4.1
26.1
—
—
0.1
—
26.2
3.0
—
0.5
1.7
2.8
8.0
23.4
2.0
0.2
4.9
2.9
33.4
22.7
—
—
0.1
—
22.8
0.7
2.0
0.2
4.8
2.9
10.6
24.9
2.2
0.4
7.0
3.1
37.6
24.5
—
—
0.9
—
25.4
0.4
2.2
0.4
6.1
3.1
12.2
0.1
4.0
10.5
0.1
10.4
10.2
6.8
3.4
F-54
The provision for personnel primarily represents obligations for anniversary payments and earlyretirement. The provisions for early-retirement plans will be completely paid out in six years. The outflow
takes place on a continuous basis. The Group owns bonds and securities that serve as plan assets for early
retirement benefits and have been offset against the obligations resulting from early retirement.
A provision for onerous contracts is recorded to anticipate warranty and product liability obligations and
losses from contractual agreements.
Provisions for environmental protection include costs for anticipated obligations resulting from potential
contamination of soil and water at the Group’s facility in Portland, Oregon, United States. The property is
under investigation of releases of certain contaminants, including trichloroethylene that was formerly used
by the subsidiary in the United States. Furthermore, prior owners of the property in Portland caused
releases of manufactured gas plant wastes, herbicides, pesticides, and petroleum products, and other
hazardous substances. The Group has insurance coverage that has provided reimbursement for the
majority of the defense, investigation and remediation costs that the Group has incurred to date. Although
substantial coverage remains, future defense, investigation and remediation costs may not be fully
reimbursed by the insurance coverage. Because there have not been determinations of the nature or extent
of the further investigations and remediation efforts that will be required, management believes that it is
not possible to reasonably estimate the amount or range of costs which the Group may incur in connection
with the contamination at the property in Portland.
The provisions for restructuring comprise severance payments for departing employees, demolition
obligations and similar charges.
The following table shows the development of the sundry provisions for the years 2014, 2013 and 2012:
January 1,
2014
Utilization Reversal Addition
In EUR millions
Personnel . . . . . . . . . . .
Sundry . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Interest and
exchange
December 31,
rate
Other*
2014
.
.
.
.
.
23.4
2.0
0.2
4.9
2.9
(1.0)
(2.0)
(0.2)
(1.7)
—
—
—
—
(1.6)
(0.5)
7.2
—
0.5
0.2
0.4
0.1
—
—
—
—
(0.6)
—
—
—
—
29.1
—
0.5
1.8
2.8
Total . . . . . . . . . . . . . . . . . . . . . . . .
33.4
(4.9)
(2.1)
8.3
0.1
(0.6)
34.2
January 1,
2013
In EUR millions
Personnel . . . . . . . . . . .
Sundry . . . . . . . . . . . . .
.
.
.
.
.
24.9
2.2
0.4
7.0
3.1
(8.4)
(2.0)
(0.4)
(2.0)
(1.5)
—
(0.2)
—
(1.8)
(1.1)
3.8
2.0
0.2
2.8
2.4
—
—
—
—
—
3.1
—
—
(1.1)
—
23.4
2.0
0.2
4.9
2.9
Total . . . . . . . . . . . . . . . . . . . . . . . .
37.6
(14.3)
(3.1)
11.2
—
2.0
33.4
*
.
.
.
.
.
.
.
.
.
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.
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.
.
.
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.
.
.
.
.
.
.
.
.
.
Interest and
exchange
December 31,
rate
Other*
2013
Provisions for early retirement have been offset against corresponding secutities.
January 1,
2012
In EUR millions
Personnel . . . . . . . . . . .
Risk of ligitation . . . . . .
Sundry . . . . . . . . . . . . .
.
.
.
.
.
.
24.6
2.4
0.9
0.3
1.3
0.9
(1.1)
(2.4)
(0.5)
(0.2)
(0.3)
—
—
—
(0.3)
—
(1.0)
—
2.1
2.2
0.3
6.7
—
2.2
—
—
—
0.2
—
—
(0.7)
—
—
—
—
—
24.9
2.2
0.4
7.0
—
3.1
Total . . . . . . . . . . . . . . . . . . . . . . . .
30.4
(4.5)
(1.3)
13.5
0.2
(0.7)
37.6
*
.
.
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.
.
.
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.
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.
.
.
.
.
.
.
.
Interest and
exchange
December 31,
rate
Other*
2012
Provisions for early retirement have been offset against corresponding secutities.
F-55
The provision for taxes comprises amounts for current income tax obligations and risks from tax audits. Tax
obligations in Germany result from periods of assessment before the PLTA became effective on January 1,
2009. In addition, the tax obligations of the foreign entities are taken into account. The actual amount of
non-current tax provisions will largely turn into payouts over the next five years.
The following table shows the development of the provision for income taxes for the years 2014, 2013 and
2012:
In EUR millions
January 1,
2014
Utilization
Reversal
Addition
Interest and
exchange rate
December 31,
2014
10.5
(10.5)
—
3.8
0.3
4.1
January 1,
2013
Utilization
Reversal
Addition
Interest and
exchange rate
December 31,
2013
10.2
(3.4)
—
4.0
(0.3)
10.5
January 1,
2012
Utilization
Reversal
Addition
Interest and
exchange rate
December 31,
2012
10.2
(3.7)
—
3.5
0.2
10.2
Taxes . . . . . . . . . . . . . . . . . . . . . .
In EUR millions
Taxes . . . . . . . . . . . . . . . . . . . . . .
In EUR millions
Taxes . . . . . . . . . . . . . . . . . . . . . .
16
Trade Liabilities and Other liabilities
of which
of which
of which
In EUR millions
Trade liabilities . . . . . . . . . . . . .
55.8
—
55.8
39.7
—
39.7
54.7
—
54.7
.
.
.
.
.
3.0
0.8
1.7
5.5
10.6
—
—
—
—
—
3.0
0.8
1.7
5.5
10.6
3.2
0.6
1.1
8.8
6.8
—
—
—
—
—
3.2
0.6
1.1
8.8
6.8
2.8
0.7
0.7
8.9
9.6
—
—
—
—
—
2.8
0.7
0.7
8.9
9.6
...
...
...
33.5
67.1
0.7
3.8
45.5
—
29.7
21.6
0.7
0.2
11.0
0.8
—
3.2
—
0.2
7.8
0.8
3.2
26.9
1.9
0.2
10.6
—
3.0
16.3
1.9
Other liabilities . . . . . . . . . . . . 122.9
of which > 5 years . . . . . . . .
—
49.3
—
73.6
—
32.5
—
3.2
—
29.3
—
54.7
—
10.8
—
43.9
—
—
—
—
—
—
—
—
—
Other tax liabilities . . . . .
Social security . . . . . . . . .
Payroll . . . . . . . . . . . . . .
Profit-sharing and bonuses
Other personnel liabilities
Derivative financial
instruments . . . . . . . . .
Prepayments received . . .
Sundry . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
Income tax liabilities . . . . . . . . .
—
Payables relating to social security refer in particular to amounts withheld that have not been paid.
The other payroll liabilities include primarily vacation and flextime credits.
Within the scope of long-term supply agreements with customers, the Group has received prepayments for
future shipments of wafers. Depending on the level of future sales, these prepayments will be offset against
shipments or repaid to the customers.
The liability from derivative financial instruments represents the negative fair value of these instruments.
17
Other Financial Obligations and Contingencies
The Group leases property, equipment, vehicles and IT equipment by way of rental agreements and
operating leases. With the exception of the property leases that have terms until the year 2027, the rentals
and leases have terms up to five years.
Expenses for lease and rent have been in the years 2014, 2013 and 2012 A 6.1 mn, A 5.4 mn and A 6.0 mn
respectively.
F-56
Other financial obligations
In EUR millions
2014
As of
December 31,
2013
Obligations from rental and operating lease agreements
due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
due between one to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
due after five years or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5
6.2
29.3
0.6
1.1
0.2
0.6
1.1
0.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38.0
1.9
1.9
2012
At the years ended December 31, 2014, 2013 and 2012 obligations from purchase commitments were
A 6.7 mn, A 8.2 mn and A 12.1 mn respectively. The commitments primarily related to property, plant and
equipment.
As of December 31, 2013, the Group had a long-term take-or-pay commitment to ensure capacity
utilization at SSW. Under the agreement the Group was obliged to pay a minimum of approximately
A 24 mn annually to SSW (2012: A 29 mn).
The Group enters into long-term purchase agreements with minimum commitments. These minimum
purchasing obligations amounted to A 7.8 mn as of each December 31, 2014, 2013 and 2012.
Contingencies are potential obligations based on past events, the resolution of which will not be confirmed
until the occurrence of one or more uncertain future events. Present obligations can likewise be
contingencies if the probability of an outflow of resources is not more likely than not to justify a provision
or the amount of the obligation cannot be estimated with sufficient reliability.
The investment in SSW was pledged to serve as collateral for bank loans for the project financing incurred
by SSW as of December 31, 2013. SSW repaid its bank loans in 2014.
18
Earnings per Share
2014
Net loss attributable to Siltronic AG shareholders in EUR mn . .
Average number of outstanding common shares (units) . . . . . . .
Number of common shares outstanding at the end of the year
(units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012
(16.0)
(109.3)
(90.6)
50,000,000 50,000,000 50,000,000
50,000,000
Earnings per common share in Euro (average) . . . . . . . . . . . . .
(0.32)
Dividend payment per common share in Euro . . . . . . . . . . . . . .
5.39
19
2013
50,000,000
(2.19)
—
50,000,000
(1.81)
—
Financial Instruments
The following tables show financial assets and liabilities by measurement categories and classes for the
years ended December 31, 2014, 2013 and 2012, respectively. Also presented are liabilities from derivatives
for which hedge accounting is used, even though they do not belong to any of the IAS 39 measurement
categories.
The fair value of financial instruments measured at amortized cost is determined based on discounting,
taking into account customary market interest rates that are adequate to the specific risk and correspond
to the relevant maturity. The carrying amount of current balance-sheet items approximate fair value. The
categories in accordance with IAS 39 differ between assets and liabilities measured at amortized costs and
those measured at fair value as shown in the table below. These categories are sufficient to reflect the
classes in accordance with IFRS 7 which distinguish at minimum financial instruments measured at
amortized cost from financial instruments measured at fair value. Those financial instruments which show
F-57
specific risks are derivative financial instruments only pertaining to foreign currency derivatives, which are
presented separately in the table below.
In EUR millions
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . .
Measurement According to IAS 39
Fair value
Carrying
Fair value
through
Fair value
amount as of
through
other
as of
December 31, (Amortized) profit or comprehensive December 31,
2014
cost
loss
income
2014
111.1
111.1
—
—
111.1
.
.
20.5
—
16.3
16.3
1.4
—
2.8
—
20.5
16.3
.
.
.
—
—
187.4
—
—
187.4
1.4
—
—
—
2.8
—
1.4
2.8
187.4
Total financial assets . . . . . . . . . . . . . . . . . . . . . .
319.0
Other financial assets . . . . .
Loans and receivables . . .
Derivatives for which hedge
(assets held for trading) .
Cash and cash equivalents . .
. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
accounting is not used
. . . . . . . . . . . . . . .
accounting is used . . .
. . . . . . . . . . . . . . .
Of which pursuant to IAS 39 measurement categories:
Loans and receivables . . . . . . . . . . . . . . . . . . .
Derivatives for which hedge accounting is not used
(assets held for trading) . . . . . . . . . . . . . . . . .
Derivatives for which hedge accounting is used . . . .
319.0
314.8
314.8
—
—
314.8
1.4
2.8
—
—
1.4
—
—
2.8
1.4
2.8
.
.
.
.
.
.
211.9
—
55.8
—
52.8
—
211.9
211.9
55.8
55.8
19.4
19.4
—
—
—
—
9.4
—
—
—
—
—
24.0
—
211.9
211.9
55.8
55.8
52.8
19.4
.
.
—
—
—
—
9.4
—
—
24.0
9.4
24.0
Total financial liabilities . . . . . . . . . . . . . . . . . . . .
320.5
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized at amortized cost . . . . . . . . . . . . . .
Trade liabilities . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . .
(assets held for trading) . . . . . . . . . . . . . . . .
Derivatives for which hedge accounting is used . . .
Financial liabilities recognized at amortized cost . . .
320.5
287.1
287.1
—
—
287.1
9.4
24.0
—
—
9.4
—
—
24.0
9.4
24.0
F-58
In EUR millions
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . .
Fair value
Carrying
Fair value
through
Fair value
amount as of
through
other
as of
December 31, (Amortized) profit or comprehensive December 31,
2013
cost
loss
income
2013
98.1
98.1
—
—
98.1
.
.
548.3
—
532.5
532.5
3.4
—
12.4
—
548.3
532.5
.
.
.
—
—
12.5
—
—
12.5
3.4
—
—
—
12.4
—
3.4
12.4
12.5
Total financial assets . . . . . . . . . . . . . . . . . . . . . .
658.9
Other financial assets . . . . .
Loans and receivables . . .
(assets held for trading) .
Cash and cash equivalents . .
. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
accounting is not used
. . . . . . . . . . . . . . .
accounting is used . . .
. . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . .
658.9
643.1
643.1
—
—
663.8
3.4
12.4
—
—
3.4
—
—
12.4
3.4
12.4
.
.
.
.
39.7
—
18.3
—
39.7
39.7
18.1
18.1
—
—
0.2
—
—
—
—
—
39.7
39.7
18.3
18.1
.
.
—
—
—
—
0.2
—
—
—
0.2
—
Total financial liabilities . . . . . . . . . . . . . . . . . . . .
58.0
Trade liabilities . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . .
(assets held for trading) . . . . . . . . . . . . . . . .
Derivatives for which hedge accounting is used . . .
Financial liabilities recognized at amortized cost . . .
58.0
57.8
57.8
—
—
57.8
0.2
—
—
—
0.2
—
—
—
0.2
—
F-59
In EUR millions
Trade receivables . . . . . . . . . . . . . . . . . .
Carrying
amount as of
December 31,
2012
Fair value
Fair value
through
Fair value
through
other
as of
(Amortized)
profit or comprehensive December 31,
cost
loss
income
2012
105.9
105.9
—
—
105.9
Other financial assets . . . . . . . . . . . . . . .
Available-for-sale securities . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . .
Derivatives for which hedge accounting is
not used (assets held for trading) . . . .
used . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . .
456.8
—
—
448.4
—
448.4
3.1
—
—
5.3
0.3
—
456.8
0.3
448.4
—
—
3.1
—
3.1
—
11.5
—
—
11.5
11.5
—
—
—
5.0
—
—
5.0
11.5
11.5
Total financial assets . . . . . . . . . . . . . . .
574.2
Of which pursuant to IAS 39 measurement
categories:
Available-for-sale securities . . . . . . . . . .
used . . . . . . . . . . . . . . . . . . . . . . .
574.2
565.8
0.3
565.8
—
—
—
—
0.3
565.8
0.3
3.1
—
3.1
—
3.1
5.0
—
—
5.0
5.0
Trade liabilities . . . . . . . . . . . . . . . . . . .
Recognized at amortized cost . . . . . . . .
Other financial liabilities . . . . . . . . . . . . .
Recognized at amortized cost . . . . . . . .
used . . . . . . . . . . . . . . . . . . . . . . .
54.7
—
24.9
—
54.7
54.7
21.7
21.7
—
—
1.4
—
—
—
1.8
—
54.7
54.7
24.9
21.7
—
—
1.4
—
1.4
—
—
—
1.8
1.8
Total financial liabilities . . . . . . . . . . . . .
79.6
Of which pursuant to IAS 39 measurement
categories:
Financial liabilities recognized at
amortized cost . . . . . . . . . . . . . . . .
used . . . . . . . . . . . . . . . . . . . . . . .
79.6
76.4
76.4
—
—
76.4
1.4
—
1.4
—
1.4
1.8
—
—
1.8
1.8
The loans and receivables reported include trade receivables and other loans, as well as cash and cash
equivalents. Cash and cash equivalents in foreign currency are measured at the exchange rate on the
reporting date. Their carrying amounts approximate their fair values. The fair value of the loans
corresponds to the present value of the expected future cash flows. Discounting is carried out on the basis
of the interest rates on the reporting date.
Financial assets include available-for-sale securities and shares in funds for securing obligations resulting
from early retirement. The fair values of the securities match their quoted prices.
The carrying amounts of trade payables and current other liabilities approximate their fair values. The fair
values of financial liabilities constitute the present value of the expected future cash flows. Discounting is
carried out on the basis of the interest rates as of the reporting date.
The following table shows the net gains and losses from financial instruments by measurement category.
In EUR millions
2014
Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available-for-sale financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities recognized at amortized cost . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.6 (2.6) (7.8)
— (0.3) 0.1
(2.3) —
0.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-60
4.3
2013
2012
(2.9) (7.5)
The net result of the category ‘‘Loans and receivables’’ was primarily due to net losses and gains from
exchange-rate effects, interest income from financial assets, demand deposits, net of valuation allowances.
The category ‘‘Available-for-sale financial assets’’ includes interest income from fixed-interest securities.
Gains and losses from changes in the fair value of foreign exchange rates which do not meet the
requirements of IAS 39 for hedge accounting are recorded in the category ‘‘fair value through profit or
loss’’. The effects of fair value hedge accounting are reported here as well.
The interest income from financial assets which are not recognized at fair value through profit or loss
amounts to A 0.1 mn in 2014, A 0.4 mn in 2013 and A 0.3 mn in 2012. This interest income primarily comes
from deposits and loans.
The interest expenses from financial liabilities which are not recognized at fair value through profit or loss
were A 2.0 mn in 2014, A 0.3 mn in 2013 and A 0.4 mn in 2012.
The net losses in the category ‘‘Financial liabilities recognized at amortized cost’’ primarily consist of
interest expenses on financial liabilities and effects resulting from valuations with different foreign
exchange rates.
The financial assets and liabilities measured at fair value in the financial statements were allocated to one
of three categories in accordance with the fair value hierarchy described in IFRS 13.
The levels of the hierarchy are as follows.
Level I:
Financial instruments measured using quoted prices in active markets (markets showing
appropriate liquidity) which are representative to the financial instrument being measured.
Level II:
Financial instruments measured using valuation methods based on observable market data, the
fair value of which can be determined using similar financial instruments traded in active
markets or using valuation methods all of whose parameters are observable. These include
hedging and non-hedging derivative financial instruments and loans.
Level III:
Financial instruments measured using valuation methods not based on observable parameters,
the fair value of which cannot be determined using observable market data and which require
application of different valuation methods (typically applied for over-the-counter derivatives
and unquoted equity instruments).
The following tables show the categories in the fair value hierarchy to which the financial assets and
liabilities measured at fair value in the statement of financial position are allocated. The tables also show
financial assets and liabilities measured at cost in the statement of financial position; numbers represent
fair values.
Level I
In EUR millions
Level II
Level III
Total
Financial assets measured at fair value
Derivatives, hedge accounting is not applied (held for trading) . . .
Fair value through other comprehensive income
Derivatives, hedge accounting is applied . . . . . . . . . . . . . . . . . . . .
—
1.4
—
1.4
—
2.8
—
2.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
4.2
—
4.2
Financial liabilities measured at fair value
—
9.4
—
9.4
—
24.0
—
24.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
33.4
—
33.4
Financial liabilities recognized at amortized cost: . . . . . . . . . . . . . . .
—
211.9
—
211.9
F-61
Level I
In EUR millions
Level II
Level III
Total
—
3.4
—
3.4
—
12.4
—
12.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
15.8
—
15.8
Financial assets measured at amortized cost: loans . . . . . . . . . . . . . .
—
—
142.6
142.6
—
0.2
—
0.2
—
—
—
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
0.2
—
0.2
Level I
In EUR millions
Level II
Level III
Total
Available-for-sale financial assets . . . . . . . . . . . . . . . . . . . . . . . . .
—
3.1
—
3.1
—
0.3
5.0
—
—
—
5.0
0.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.3
8.1
—
8.4
Financial assets measured at amortized cost: loans . . . . . . . . . . . . . .
—
170.2
—
170.2
—
1.4
—
1.4
—
1.8
—
1.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
3.2
—
3.2
The Group regularly reviews whether its financial instruments are appropriately allocated to the hierarchy
levels. No changes to the valuation method occurred compared with the year presented and no
non-recurring fair value measurements were carried out. At December 31, 2013 financial assets
representing loans with a carrying amount of A 142.6 nm were transferred from level II to level III because
during the year 2013, the character of the loans partly represented from economical perspective equity.
Because of that, the loans were partly recorded as net investment in a foreign entity. The valuation was
then no longer based on market data but on expected discounted cash flows of the debtor.
Market values are calculated using information available on the reporting date and based on
counterparties’ quoted prices or via appropriate valuation methods (discounted cash-flow or
well-established actuarial methodologies, such as the par method).
Derivative financial instruments are recognized at fair value and are thus subject to a recurring fair value
assessment. They are categorized as Level 2 fair values.
The fair value of a derivative financial instrument is calculated based on market data such as exchange
rates or yield curves in accordance with market-specific valuation methods. The calculation of the fair
value reflects our and the counterparty’s default risk, using maturity-matching and market-observable CDS
values. Financial assets measured at amortized cost comprise loans to Joint Ventures.
F-62
Their fair value measurements have been categorized as Level 3 fair values based on the inputs of the
valuation techniques used. The valuation model (discounted cash flow method) considers the present value
of the Group’s expected future cash flows using risk-adjusted discount rates.
The major unobservable inputs when measuring the loans at fair value have been then EBITDA margin
applicable to the terminal value and investments necessary in property, plant and equipment in percentage
of sales. If the EBITDA margin would increase or decrease by 1%-point, the impact on the fair value
equals A 10 mn and in case investments in property, plant and equipment increase or decrease in
percentage of sales by 2.0%-points, the impact on the fair value is between A 9 mn and A 10 mn.
Financial liabilities measured at amortized cost include a credit facility with Wacker Chemie AG, a loan
from non-controlling interests, and a negative balance under the treasury management arrangement with
Wacker Chemie AG. Their fair value is determined using the net present value method and is based on
standard market interest rates.
Disclosures to derivative financial instruments
In cases where the Group hedges against foreign currency risks, it uses derivative financial instruments, in
particular currency forward exchange contracts and foreign exchange swaps. Derivatives are used only if
they are offset by scheduled transactions arising from operations (underlying transactions). The scheduled
transactions also include anticipated, but not yet invoiced, sales in foreign currencies.
Foreign exchange hedging is carried out mainly for the U.S. dollar, Japanese yen and Singapore dollar.
Hedging activities for foreign currencies reflect probable future cash flows.
Operational hedging in the foreign exchange area also relates to receivables and liabilities, and generally
covers time horizons of between three and four months. The time horizon for strategic hedging is between
four and a maximum of 20 months. The hedged cash flows influence the statement of profit or loss at the
time when sales are realized. The cash inflows are usually recorded shortly afterward, depending on the
payment deadline. As well as receivables from, and liabilities to, third parties, intercompany financial
receivables and liabilities are hedged.
The market values refer to the repurchase values (redemption values) of the financial derivatives and are
calculated using recognized actuarial methods.
The derivatives are recognized at their market values, irrespective of their stated purpose. They are
reported in the statement of financial position under other assets or other liabilities. Where eligible, cash
flow hedge accounting is applied for the strategic hedging of currency exchange risks from future foreign
exchange cash flows. In such cases, changes in the market values of foreign exchange contracts and changes
in the intrinsic values of currency options are recognized in other comprehensive income until the
underlying transaction takes place, insofar as the hedge is effective. When future transactions are realized,
the effects accumulated in other equity items are reversed through profit or loss.
For strategic hedging purposes, staggered hedging ratios of between 25% and 50% are used in relation to
the expected net exposure in U.S. dollars. The expected net exposure on U.S. dollar basis for 2015 is
approximately 50% hedged, with the expected additional semiconductor-business net exposure for 2016
amounting to approximately 20% hedged.
The accumulated unrealized gains and losses recorded directly in other equity items at December 31
included losses from cash flow hedges of A 21.2 mn in 2014, gains of A 12.4 mn in 2013 and gains of
A 3.8 mn in 2012. In the loss for the period, gains or losses from hedge ineffectiveness were insignificant, as
the hedging relationships were almost entirely effective.
Depending on the nature of the underlying transaction, cash flow hedges are posted in the statement of
profit or loss under the operating result or, if financial liabilities are being hedged, under net interest
income or other financial result.
F-63
Nominal values and market values of derivative financial instruments
As of
December 31, 2014
Nominal Market
values
values
In EUR millions
As of
December 31, 2013
Nominal Market
values
values
As of
December 31, 2012
Nominal Market
values
values
Foreign currency derivatives . . . . . . . . . . . . . . . .
734.1
(29.3)
537.0
15.6
712.8
4.9
Market values for derivative financial instruments
within hedge accounting . . . . . . . . . . . . . . . . .
—
(21.2)
—
12.4
—
3.2
The foreign exchange derivatives contain forward exchange contracts with nominal amounts of
USD 460.5 mn, JPY 17.1 bn and SGD 435.5 mn at December 31, 2014. Derivatives with market values of
A 24.7 mn are due in 2015, and with market values of A 4.6 mn are due in 2016.
The following table provides information on the netting of financial assets and liabilities in the
consolidated statement of financial position. It also shows the financial effects of a possible setting off of
financial instruments from netting agreements, enforceable global netting agreements or similar
agreements.
I
In EUR millions
Derivatives with a positive
market value . . . . . . . . . .
Derivatives with a negative
market value . . . . . . . . . .
Gross
amounts of
recognized
financial
assets /
liabilities
II
Gross
amounts of
recognized
financial
assets /
liabilities
set off in the
balance
sheet
I - II
Net amounts
of financial
assets /
liabilities
presented in
the balance
sheet
Related Amounts not
set off in the Balance
Cash
Financial
collateral
instruments
received
Net amount
5.4
1.2
4.2
3.9
—
0.3
(34.6)
(1.2)
(33.4)
(3.9)
—
(29.5)
market value . . . . . . . . . .
market value . . . . . . . . . .
16.3
0.5
15.8
0.2
—
15.6
(0.8)
(0.6)
(0.2)
(0.2)
—
—
market value . . . . . . . . . .
market value . . . . . . . . . .
9.0
0.9
8.1
2.5
—
5.6
(4.1)
(0.9)
(3.2)
(2.5)
—
(0.7)
In addition to the amounts offset under the provisions on netting pursuant to IAS 32, the table also
includes those amounts that may not be netted pursuant to IAS 32.
As a part of strategic hedging of foreign currency cash flows, the Group closes out forward-exchange
contracts prior to maturity by offsetting transactions. The strategic forward-exchange contract and the
corresponding offsetting forward-exchange transaction are recognized as a net amount in accordance with
IAS 32. In addition, general offsetting agreements, which apply only in cases of insolvency, have been
concluded with a number of banks.
The Group has not received any pledged cash security for positive market values of derivatives nor pledged
any cash security for negative market values.
Management of financial risks
The following disclosures explain the management of the financial risks of the Group. Other parts of these
notes include more quantitative information to financial assets and financial liabilities or contingencies.
In the normal course of business, the Group is exposed to credit, liquidity, and market risks from financial
instruments. The goal of financial risk management is to limit risks from operating business and the
resultant financing requirements by using certain derivative and non-derivative hedging instruments.
F-64
In terms of assets, liabilities and planned transactions, the Group faces risks resulting from the fluctuation
of foreign exchange rates. Changes of interest rates and equity prices do not play a significant role for the
Group.
Generally, only those risks which have an impact on the cash flow of the Group are hedged. To mitigate
default risks, hedging instruments are only entered with counterparties of high credit rating.
The basic rules of the financial management are determined by the Management Board and monitored by
the Supervisory Board of the Group. The Management Board has the overall responsibility for the
implementation and monitoring of the risk management of the Group. Part of this system is the
management of financial risks. Among other things, the system for managing financial risks has a guideline
defining the usage and the extent of derivative financial instruments and committees supervising the
application of the guideline, evaluating the efficiency of the derivative financial instruments entered and
defining additional risk limits when necessary.
The Group mitigates financial risks through the risk management system it has in place. That system is
monitored by the Supervisory Board. The fundamental purpose of the risk management system is to
identify, analyze, coordinate, monitor and communicate risks in a timely manner. The Management Board
of the Group receives regular analyses on the extent of those risks. The analyses focus on market risks, in
particular on the potential impact of raw-material price risks, foreign-currency exchange risks, and interest
rate risks on net interest income.
Foreign currency risks
Foreign currency risks generally result from investments, financing measures and operating business. The
Group hedges foreign currency risks as far as it can influence the cash flow of the Group. Foreign
currencies which do not influence the cash flow of the Group result from the translation of assets and
liabilities of foreign subsidiaries (or the investment in SSW before the company was consolidated into the
Group) into euro. Such risks are not hedged because they refer to long-term investments.
Since it is very common in the semiconductor industry to transact in U.S. dollar and the proceeds for the
Group from the sale of products (operating business) significantly exceed the cash-outflows in U.S. dollar
(operating business and investments), the Group faces a U.S. dollar foreign exchange risk. The Group also
faces foreign exchange risk related to the Japanese yen and the Singapore dollar.
The net exposure for foreign currency, i.e. the amount in the same foreign currencies remaining after
eliminating cash-inflows and cash-outflows, is hedged according to the Group policy.
In the financial area, foreign exchange rate risks of the Group result from loans denominated in foreign
currencies which exist for financing purposes of the Group against affiliates and banks.
When material, these risks are hedged against currency exchange rates and swaps are used as hedging
instruments.
To record market risks, IFRS 7 requires sensitivity analyses which show the results from hypothetical
changes of relevant risk variables on the result and on equity. The periodical changes are calculated by
applying the hypothetical changes of the risk variables on all existing financial instruments as of the
balance sheet date. The sensitivity analyses regarding foreign exchange have the following presumptions:
The existing primary monetary financial instruments (cash and cash equivalents, receivables, interest
bearing and non-interest bearing liabilities) as of the balance sheet date represent a normal level. In the
future, approximately 70% of consolidated sales which is the current level will be invoiced in USD. Payouts
in foreign currency remain on the current level which is dependent on the production level. Thus, the
Group is only opposed to foreign currency exchange risks coming from trade receivables not hedged and
the change in fair value of existing derivative financial instruments.
If the USD had been increased and decreased respectively by 10% against the Euro as at December 31,
2014, the fair value of the hedging instruments would have been approximately A 25.5 mn lower and higher,
respectively. The corresponding change in fair value at December 31, 2013 would have been A 26 mn and at
December 31, 2012 A 32 mn. The change would have been captured in other comprehensive income. If the
Yen had increased or decreased respectively by 10% against the Euro as at December 31, 2014, the fair
value of the hedging instruments would have changed A 6.7 mn. The corresponding change in fair value at
December 31, 2013 would have been nil and not material at December 31, 2012 since hedging instruments
related to Yen were minor.
F-65
Interest rate risk
Since the Group had no material interest bearing net liabilities at the balance sheet date and does not
expect to face major net liabilities, interest rate risks are not hedged. And because the derivatives related
to foreign currencies are not subject to changes in interest rates, no interest rate risk arises thereof.
Other price risks
The Group does not face any material other market price risks, which generally result from stock market
prices.
Credit risk (risk of default)
In terms of financial instruments, the Group is exposed to a default risk should a contractual party fail to
fulfill its commitments. The maximum risk is therefore the amount of the respective financial instrument’s
positive fair value. To limit the risk of default, transactions are conducted only within defined limits and
with partners of very high credit standing. To make efficient risk management possible, the market risks
within the Group are controlled centrally. The conclusion and handling of transactions comply with
internal guidelines and are subject to monitoring procedures that take account of the separation of duties.
As for operations, outstanding receivables and default risks are continually monitored and partly hedged
against by means of trade credit insurance. Receivables from major customers are not so high as to
represent an extraordinary concentration of risks. The Group has implemented rules to monitor
receivables including dunning and stop of shipments. Default risks are accounted for by impairment, taking
advance payments received into account.
To minimize the credit risk resulting from all base transactions related to the original financial instruments,
collateral (e.g. retention of title) is requested or credit information and references respectively are
obtained or historical data from prior business relationship, especially payment behavior, is used to avoid
payment default. The measure depends on the type and amount of transaction. As far as default risk can
be recognized for individual financial assets, such risks are covered by specific reserves for bad debt.
In the last three years the expense for default was on average less than 3% of total sales.
Liquidity risk
A liquidity risk means that a company may not be able to meet its existing or future financial obligations
because of insufficient funds. Continuous liquidity and financial flexibility are ensured by cash pooling
agreements with Wacker Chemie AG as well as by credit lines. The loans and credit lines comprise
A 43.2 mn of which A 35.8 mn relate to the loan from Samsung and of which A 7.4 mn relate to credit lines
from banks which are available until December 31, 2015. Interest on the credit lines are each based on the
actual interbank rate depending on the term of the usage less a defined margin.
The liquidity condition of the Group is monitored by comparing cash-outflows for each of the next three
months with the cash proceeds. In addition, actual cash flows are compared to forecasted cash flows to
detect unplanned developments early. Moreover, a cash flow forecast on a monthly rolling basis is in place
covering the period to the end of the year. This forecast is in accordance with the monthly forecasts of
statement of profit or loss and statement of financial position which are also covering the period to the end
of the year.
By these means the Company ensures that it will meet financial liabilities without negatively affect its
reputation.
According to the policy of the Group, guarantees are generally issued only to fully-owned subsidiaries. No
guarantees had been issued as of the years ended December 31, 2014, 2013 or 2012.
Market risk
Market risk describes the risk that the fair value or future cash flows of an original or derivative financial
asset will change due to the volatility of the market.
20
Notes to the Statement of Cash Flows
The Group was primarily financed by the cash management system with Wacker Chemie AG and a loan
granted by Wacker Chemie AG.
F-66
Cash and cash equivalents shown in the statements of cash flows comprise cash and credit balances at
banks if the maturity is within three months.
21
Segment Reporting
The Group is engaged in one reportable segment that includes the development, production and
marketing of semiconductor wafers with a wide variety of features satisfying numerous product
specifications to meet customers’ precise technical specifications, which are utilized in the manufacture of
semiconductor devices. Based on the fact that in the wafer industry the allocation of resources is derived
from a wide variety of specifications the Group is operating in one segment. The products can differ
between diameters, between polished and epitaxial wafer, between different pulling technologies and other
features.
The geographical information during the reporting periods was as follows:
Israel and
Asia
Europe
excluding
excluding United
Taiwan and
Siltronic
Germany Germany States Taiwan Japan
Japan
Consolidation Group
In EUR millions
2014
External sales by customer location .
equipment and intangible assets .
Non-current assets (December 31) .
2013
2012
56.8
100.0
121.9
192.2
62.6
312.5
—
846.0
27.2
229.8
—
—
0.9
8.7
—
—
—
0.1
12.6
346.2
—
16.6
40.7
601.4
56.7
111.1
116.7
179.6
77.6
201.3
—
743.0
24.8
268.9
—
—
1.7
8.6
—
—
0.1
4.6
3.9
54.1
—
(3.4)
30.5
332.8
54.0
133.0
156.1
169.5 108.9
246.5
—
868.0
51.7
361.0
—
—
1.3
9.0
18.8
60.6
—
(5.0)
72.7
431.4
—
—
0.9
5.8
The sales in the region Asia excluding Taiwan and Japan almost primarily relate to South Korea, China
and Singapore.
In 2014, the Group realized sales with two customers constituting 13% each of consolidated sales. In 2013,
one customer constituted 13% of consolidated sales and in 2012 two customers constituted 10% each of
consolidated sales.
22
Related Party Disclosures
The disclosure requirements according to IAS 24 refer to transactions (i) with its controlling parent
Wacker Chemie AG and the ultimate controlling shareholder of Wacker Chemie AG which is
Dr. Alexander Wacker Familiengesellschaft mbH (holding more than 50% of the voting shares in Wacker
Chemie AG), (ii) with SSW before consolidation, (iii) between SSW and Samsung, the non-controlling
shareholder of SSW (after consolidation), (iv) with Wacker Pensionskasse and (v) with members of the
Management Board and Supervisory Board of the Company.
The amounts recorded in the statement of profit or loss resulting from transactions with related parties
were:
For the Years Ended
December 31,
2014
2013
2012
In EUR millions
Sales . . . . . . . . . . .
Cost for goods sold
Interest expense . . .
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F-67
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119.3
178.8
0.6
1.1
24.5
217.5
6.4
0.0
39.6
254.2
5.9
0.0
In 2014, 2013 and 2012, sales include research and development services for A 2.0 mn, A 3.3 mn and A 5.0 to
Wacker Chemie AG. The Group recognized sales with SSW of A 0.8 mn in 2014 before acquisition in
January 24, 2014, A 11.5 mn in 2013 and A 23.0 mn in 2012. Sales were generated by license fees, services
and the sale of some intermediate products. Sales with related parties include sales with Samsung of
EUR 113.2 million in 2014. Interest expense of EUR 1.1 million is due to Samsung in 2014.
Cost of goods sold primarily relate to (i) the purchase of the major raw material Polysilicon from Wacker
Chemie AG, (ii) a services framework agreement the Company has entered with Wacker Chemie AG
covering technical engineering, materials management and procurement, site services at the production
facility in Burghausen and corporate administrative services and (iii) to wafers purchased from SSW for
trade purposes (before consolidation).
The following table shows inventories, receivables from and liabilities to related parties recorded in the
statement of financial position for the years ended December 31, 2014 and 2013:
As of December 31,
2014
2013
2012
In EUR millions
Shareholder loan to SSW . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . .
of which Samsung and SSW . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which advance payment to Wacker Pensionskasse
of which prepayment to SSW . . . . . . . . . . . . . . . . .
Financial receivable from Wacker Chemie AG . . . . .
Financial liability from Wacker Chemie AG . . . . . . .
Financial liability from Samsung . . . . . . . . . . . . . . .
Trade liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which SSW . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
of which prepayment from Samsung . . . . . . . . . . . .
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—
12.3
12.3
10.6
10.6
9.8
9.5
—
—
176.0
35.8
9.6
9.6
—
54.1
54.1
142.6
3.0
3.0
5.7
5.6
18.3
9.5
8.6
271.5
—
—
4.8
0.9
3.9
—
—
170.2
4.0
4.0
5.0
5.0
8.5
8.5
—
149.7
—
—
9.5
5.3
4.2
—
—
The inventories relate to shipments of raw materials supplied by Wacker Chemie AG.
Trade receivables from SSW carried a valuation allowance of A 2.0 mn as of December 31, 2013 which was
used. Samsung’s prepayment represented a cash inflow for the year 2014 amounting to A 54.6 mn. As at
December 31, 2014 the prepayments due to Samsung resulting from the prepayments SSW received in
2014 and earlier amounted to A 54.1 mn.
In December 2014, the Company entered into a labor support agreement (the ‘‘Labor Support
Agreement’’) with Wacker Chemie AG pursuant to which the Company agreed that Wacker Chemie AG
will hire up to 500 of the Company’s employees by the end of 2019. Pursuant to the Labor Support
Agreement, Wacker Chemie AG agreed to hire these employees, establish new employment agreements
with them, and to assume all compensation obligations resulting from their employment by the Company
(including agreed benefits, deferred compensation and bonuses) other than any compensation which has
already vested at the time of employment by Wacker Chemie AG. In return, the Company agreed to a
payment of A 78,000 to Wacker Chemie AG for each of the up to 500 employees to be transferred to
Wacker Chemie AG for a total of A 39.0 mn, which the Company paid Wacker Chemie AG in December
2014. In addition, the Company agreed to compensate Wacker Chemie AG for compensation obligations
resulting from such employees’ employment with us (including agreed benefits, deferred compensation and
bonuses), calculated on the basis of provisions the Company made with respect to such compensation
obligations in accordance with IFRS.
Under the PLTA, Wacker-Chemie Dritte Venture GmbH absorbed losses of A 15.5 mn, A 100.5 mn and
A 108.4 mn respectively for the years 2014, 2013 and 2012. These represented cash injections into the
capital reserve, see note 13.
Total remuneration for key management personnel for the years 2014, 2013 and 2012 was A 1.7 mn,
A 1.5 mn and A 1.3 mn, respectively for short-term employment benefits and for post-employment benefits
of A 0.3 mn for each year.
F-68
Total remuneration for the Supervisory Board for the years 2014, 2013 and 2012 was A 0.2 mn each.
Renumeration for prior members of the Supervisory Board was A 0.0 mn for each year.
Pension reserves related to former members of board amounted to approximately of A 8.7 mn as of
December 31, 2014, A 5.4 mn as of December 31, 2013 and A 4.1 mn as of December 31, 2012.
23
Subsequent Events
Subsequent to December 31, 2014, there were no adjusting events.
These consolidated financial statements were authorized for issue by the Management Board on May 7,
2015.
F-69
Independent Auditor’s Report
To Siltronic AG
We have audited the accompanying consolidated financial statements of Siltronic AG and its subsidiaries
(‘‘the Company’’), which comprise the consolidated statements of financial position as of December 31,
2014, 2013 and 2012 and the related consolidated statements of profit and loss, comprehensive loss,
changes in equity, and cash flows for each of the years in the three-years period ended December 31, 2014
and notes, comprising a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, as adopted by the EU, and for
such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial
position of the Company as at December 31, 2014, 2013 and 2012, and of its consolidated financial
performance and its consolidated cash flows for each of the years in the three-years period ended
December 31, 2014 in accordance with International Financial Reporting Standards, as adopted by the
EU.
Munich, May 7, 2015
KPMG AG
Wirtschaftsprüfungsgesellschaft
Pastor
Wirtschaftsprüfer
Schmalzl
Wirtschaftsprüferin
F-70
Siltronic AG
Unconsolidated Financial Statements
as of and for the year
ended December 31, 2014
F-71
Siltronic AG: Statement of income for the financial year 2014
Note
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of internally generated assets . . . . . . . . . . . . . . . . . . . . . . . . .
Operating performance . . . . . .
Other operating income . . . . .
Cost of materials . . . . . . . . . .
Personnel expenses . . . . . . . . .
Depreciation and amortization
Other operating expenses . . . .
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Operating result . . . . . . . . . . . . .
Income from investments . . . . . .
Interest income and expense, net .
Other financial result . . . . . . . . .
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3
4
5
6
7
8
E million
2014
E million
2013
764.1
5.9
1.3
755.9
(0.5)
1.2
771.3
56.2
(435.7)
(203.7)
(63.4)
(179.8)
756.6
50.2
(452.3)
(198.7)
(109.9)
(138.5)
(55.1)
50.0
(10.0)
0.0
(92.6)
0.0
(7.7)
0.1
(7.6)
Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
40.0
Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
(15.1)
(0.4)
(100.2)
(0.3)
Result after taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from profit and loss transfer agreement . . . . . . . . . . . . . . . . . . . . . .
11
(15.5)
15.5
(100.5)
100.5
0.0
269.5
(269.5)
0.0
269.5
0.0
Net income for the year / net loss for the year . . . . . . . . . . . . . . . . . . . . . . .
Profit carried forward from the previous year . . . . . . . . . . . . . . . . . . . . . . . .
Dividend paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-72
0.0
269.5
Siltronic AG: Balance sheet of as of 31 December 2014
Note
E million
2014
E million
2013
12
13
14
2.4
223.8
129.3
2.8
259.9
129.3
355.5
392.0
15
77.7
68.3
16
76.9
277.3
354.2
67.5
423.3
490.8
Cash and bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159.0
6.3
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
590.9
565.4
0.1
0.1
946.5
957.5
100.0
340.0
8.5
0.0
100.0
340.0
8.5
269.5
ASSETS
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
Note
EQUITY AND LIABILITIES
Subscribed capital . . . . . . . . .
Capital reserves . . . . . . . . . .
Other retained earnings . . . .
Retained profit . . . . . . . . . . .
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Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
448.5
718.0
Provisions for pensions and similar obligations . . . . . . . . . . . . . . . . . . . . . . .
Other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
20
93.5
59.1
87.5
62.6
152.6
150.1
247.3
18.2
79.9
18.7
13.7
57.0
345.4
89.4
946.5
957.5
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-73
21
22
22
Siltronic AG Notes for the 2014 Fiscal Year
1
Accounting principles
The annual financial statements are prepared according to the provisions of the German Commercial
Code (HGB) for large corporations and additional requirements of the German Stock Corporation Act
(AktG).
Several items on the profit and loss account and the statement of financial position which are prescribed by
law have been summarized to improve clarity. The summarized items are shown separately in the notes
and explained where necessary. The profit and loss account is prepared according to the total cost method.
Unless explicitly stated otherwise, all data is presented in millions of euros (A millions).
The exempting consolidated financial statements for Siltronic AG, Munich and the summarized
management report of the Wacker Group are submitted to the operator of the electronic federal gazette
and can be accessed via the webpage of the company register.
2
Financial reporting and valuation principles
Sales revenues are recognized when the goods and services owed have been delivered. Sales revenue also
includes revenue from services.
Intangible assets acquired on a consideration basis are reported at their acquisition costs and scheduled to
be depreciated over a maximum of 7 years. Self-created intangible assets are not capitalized.
Property, plant and equipment are capitalized at their acquisition or production costs and linearly
depreciated according to their prospective economic life. Production and administrative buildings are
depreciated over a maximum of 40 years, plants and machines between 6 and 25 years and office
equipment and furniture between 3 and 12 year

Prospectus for the IPO

Transcription

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