CREATING TOMORROW`S SOLUTIONS

International Press Workshop 2018

WACKER POLYMERS – Polymer Binders in Everyday Life
Peter Summo, WACKER POLYMERS, March 14th, 2018
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Disclaimer

The information contained in this presentation is for background purposes only and is subject to
amendment, revision and updating. Certain statements and information contained in this presentation
may relate to future expectations and other forward-looking statements that are based on management's
current views and assumptions and involve known and unknown risks and uncertainties. In addition to
statements which are forward-looking by reason of context, including without limitation, statements
referring to risk limitations, operational profitability, financial strength, performance targets, profitable
growth opportunities, and risk adequate pricing, other words such as "may, will, should, expects, plans,
intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar
expressions identify forward-looking statements. By their nature, forward-looking statements involve a
number of risks, uncertainties and assumptions which could cause actual results or events to differ
materially from those expressed or implied by the forward-looking statements. These include, among
other factors, changing business or other market conditions and the prospects for growth anticipated by
the Company's management. These and other factors could adversely affect the outcome and financial
effects of the plans and events described herein. Statements contained in this presentation regarding
past trends or activities should not be taken as a representation that such trends or activities will
continue in the future. The Company does not undertake any obligation to update or revise any
statements contained in this presentation, whether as a result of new information, future events or
otherwise. In particular, you should not place undue reliance on forward-looking statements, which
speak only as of the date of this presentation.

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 1

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Agenda

WACKER POLYMERS: Creating Value with Binders in a Wide Variety of

Applications

WACKER POLYMERS: Successfully Transforming Global Markets with VAE

Binders and Outperforming Alternative Systems

WACKER POLYMERS: Preparing the Ground for Future Growth

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 2

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Polymer Binders – Invisible, but Indispensable in our Daily Life

Construction Polymers Consumer and Industrial Polymers

Tile Insulation Flooring Printing Inks Nonwoven Heat Seal
Adhesives Systems Lacquers

Water Proofing Plasters Skim Coat Paper and Industrial Carpet

Membranes Packaging Coatings

Concrete Gypsum Asphalt Paints and Wood / Automotive

Coatings Furniture

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 3

Peter Summo, WACKER POLYMERS, March 14th, 2018
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WACKER POLYMERS: Solutions for Polymer Based Binders

WACKER POLYMERS Polymer-Based Binder Solutions

One of the leading providers of high-
Dispersible
quality binders and polymeric additives Dispersions Polymer
Solid
Polymers
Powders
Share of Group Sales 2017

25%
Base for POLYMERS Binders
Key Figures 2017 Polyvinyl acetate, polyvinyl alcohol,
Sales: 1,245 mn € co- and terpolymers based on vinyl
EBITDA: 206 mn € acetate, ethylene, vinyl chloride and
acrylates
Employees: 1,539

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 4

Peter Summo, WACKER POLYMERS, March 14th, 2018
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VAE Technology Creates Value in a Wide Variety of Applications

Vinyl Acetate Ethylene (VAE) – Enabling Tailor-Made Solutions

Dispersible
VAE Polymer
+ Dispersions Powders
(DPP)
Vinyl acetate Ethylene Vinyl acetate ethylene (VAE)

POLYMERS main product

groups

excellent high cohesion superior improved high dry and outstanding low odor, low excellent scrub
weatherability level workability flexibility wet strength machinability VOC* resistance

Environmentally friendly solutions with high functionality and versatility

* volatile organic compounds

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 5

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Leading Market Positions as VAE Binder Solution Provider

Global Market Position – Global Market Position –

Construction Polymers* Consumer & Industrial Polymers*

Others WACKER
Others WACKER

Dairen
Dow #1 #1

Dairen

Elotex** Celanese

Main market for DPP Main market for VAE dispersions

*Construction: DPP only / Consumer & Industrials:
Source: WACKER estimates, Kline Synthetic Latex Polymers 2016 w/o atmospheric, solid resins, VINNOL® resins
** part of Functional Chemicals within Akzo Nobel N.V.
International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 6
Peter Summo, WACKER POLYMERS, March 14th, 2018
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WACKER POLYMERS with €600mn Growth in the Last Decade

Global Sales 2017:

€1,245mn*
in € mn
+7 % CAGR
1500

1000

500

0
2007 2017

Americas EMEA** Asia

in € mn in € mn in € mn
+13 % CAGR +3 % CAGR +13 % CAGR

600 600 600

400 400 400
200 200 200
0 0 0
2007 2017 2007 2017 2007 2017
* incl. Air Products Polymers acquisition in 2008
** Europe, Middle & Near East, and Africa
International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 7
Peter Summo, WACKER POLYMERS, March 14th, 2018
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Agenda

WACKER POLYMERS: Creating Value with Binders in a Wide Variety of

Applications

WACKER POLYMERS: Successfully Transforming Global Markets with

VAE Binders and Outperforming Alternative Systems

WACKER POLYMERS: Preparing the Ground for Future Growth

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 8

Peter Summo, WACKER POLYMERS, March 14th, 2018
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WACKER POLYMERS with Strong Focus on Further Growth

Growth based on Customer Focus, Substitution and Innovation

Customer Customer proximity – close to customers in all key markets

Focus Differentiated individualized service and product offering

Push transformation in construction & lever new binder concepts

Substitution
Replacement of non-VAE technologies based on value offering

Products in core segments and productivity improvements

Innovation
New applications and products beyond existing core markets

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 9

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Providing Technical Competences Close to our Customers

WACKER POLYMERS: Globally present with 15 Technical Centers and

continuously investing in our global competence network

Moscow
Allentown
Burghausen Seoul
Istanbul
Dalton
Mumbai Shanghai
Mexico City Bogota Dubai
Singapore
Technical Center Bogota:
March 2016 Jakarta Technical Center Jakarta:
São Paulo May 2017
Melbourne

Technical Center Istanbul:

November 2017 Technical Center WACKER POLYMERS

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 10

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Growing with Tailwind from Global Megatrends

Drivers for WACKER POLYMERS’ Growth

1 bn 30% of global energy-related

6% CAGR
additional people in global greenhouse gas emissions Growth of the adhesive
middle class by 2025 are attributed to buildings market in India until 2020

49 tn $
Global demand in
200,000 2-5 x
higher VOC compounds found
$ infrastructure investments
from 2016 to 2030
people are added daily to
world´s urban population
inside US homes than outside
levels

We offer solutions for global megatrends like urbanization, higher living

standards, increasing environmental & health requirements
Sources: McKinsey Global Institute, IPCC, EPA, UNEP, UN Habitat – State of the World´s Cities, Frost & Sullivan

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 11

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Offering Solutions for Construction Applications

Main Growth Drivers Benefits from VAE Growth Potential

Dry Mortar Market
good adhesion
Higher
Sustainability With polymer
Standards flexibility
modification
abrasion resistance
open time 20%

cohesive strength

Increasing Demanding material savings

Labor Costs Substrates CO2-savings
80%
machinability and labor
productivity
Without polymer
modification

Supporting transformation in construction towards higher quality

Source: WACKER estimates

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 12

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Offering Solutions for Consumer & Industrial Applications

Main Growth Drivers Benefits from VAE Growth Potential

Polymer latex binder market
broad adhesion profile
Higher Sustainability
Others VAE
Productivity high cohesion level VAc-
excellent machinability copo
SBL
low emission
PVAc
low odor
Living Feedstock fast setting
Standards Advantage
flammability resistance
SA Acrylics
feedstock versatility of C1
chemistry non-VAE technologies:
PVAc = Polyvinyl acetate
SA = Styrene acrylics
VAc-copo = Vinylacetate copolymer
SBL = Styrene butadiene latex

Replacing non-VAE technologies based on value offering

Source: WACKER estimates, Kline Synthetic Latex Polymers 2016

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 13

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Innovation as Base for Future Growth of POLYMERS

Process Improvements Product Innovation

Productivity and Product enhancement
capacity gains and new product prop-
erties (e.g. via hybrids)

Digitalization
New Applications
Data mining
low emissions and
Production support Research & flammability resistance
Productivity Development in new applications

Sustainability Regionalization
Renewable materials Regional R&D compe-
Formaldehyde and tences (e.g. new pilot
APEO-free products reactor in Nanjing)

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 14

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Focusing on Sustainability Along the Entire Value Chain

Raw Materials Production Markets Recycling

Compostable
C1 in advantage Highest Compliant with
to C2-C6 efficiency regulatory
Access to Closed loop Enabler for our
renewables production customers and
focus on needs

Sustainability with impact on the whole value chain

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 15

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Providing Sustainable Solutions for the Construction Market

CO2-Emission and Climate Protection Material Consumption

Cement production causes approxi- Besides fresh water, sand is the most
mately 5% of global man-made CO2- widely consumed natural resource
emissions Every year, some 15 bn tons of sand are
>10,000 kilowatt hours of heating mined for construction globally
energy escape through the walls of an China consumed more sand between
uninsulated detached house each year 2011 and 2013 than the USA in 100 years

WACKER POLYMERS’ products enable material savings and CO2-

emission reduction
Sources: WBCSD – Cement Sustainability Initiative, Dena, Freedonia, The Economist, USGS, Mineral Industry of China 1990-2013, The Washington Post

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 16

Peter Summo, WACKER POLYMERS, March 14th, 2018
4 4

Agenda

WACKER POLYMERS: Creating Value with VAE Binders in a Wide Variety of

Applications

WACKER POLYMERS: Successfully Transforming Global Markets with VAE

Binders and Outperforming Alternative Systems

WACKER POLYMERS: Preparing the Ground for Future Growth

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 17

Peter Summo, WACKER POLYMERS, March 14th, 2018
4 4

Unique Position with VAE Dispersions and DPP Tandem

WACKER’s Global VAE Dispersion and DPP Production Footprint

Dispersion Production

Americas EMEA Asia

WACKER
POLYMERS

DPP Production #1 in dispersions and in powders with 1 million

tons of VAE globally

Only producer with global presence of

production sites for VAE dispersions and DPP

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 18

Peter Summo, WACKER POLYMERS, March 14th, 2018
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Continuously Expanding our Production Footprint

Latest Capacity Expansions 2015 2015 2017

Polymer powder Special mono- VAE dispersions
+ 50 kt mers + 3.8 kt + 60 kt
Germany Germany Germany
2015
VAE dispersions
+ 85 kt
USA

Cologne Burghausen
Calvert City Nanjing Ulsan

2013 2013 2014 2019 2019 2019

VAE dispersions VAE dispersions Polymer powder VAE dispersions VAE dispersions Polymer powder
+ 40 kt + 60 kt + 30 kt + 30 kt + >90 kt + 80 kt
South Korea China China Nanjing South Korea South Korea

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 19

Peter Summo, WACKER POLYMERS, March 14th, 2018
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WACKER POLYMERS – Solutions for Binders Since 80 Years

Innovation in Existing and New Markets Solutions for Global Megatrends

Customer Proximity World Class Production Sites

International Press Workshop 2018 ‒ Polymer Binders in Everyday Life 20

Peter Summo, WACKER POLYMERS, March 14th, 2018
 CREATING TOMORROW`S SOLUTIONS

International Press Workshop 2018

WACKER POLYMERS – Polymer Binders in Everyday Life
Peter Summo, WACKER POLYMERS, March 14th, 2018