The focus of the PCC Group in fiscal 2025 will once again be on its predominantly long-term strategy of portfolio company development. This will, as ever, include enhancing the core activities and competitiveness of the PCC Group through further capital expenditures. Green-field and brown-field projects will also be given due consideration as opportunities arise. This applies in particular with regard to the geographic expansion of core business units into new markets. The future issues of sustainability and climate protection and the associated transformation of all production processes will continue to come to the fore. This will be associated with further investments in efficient and environmentally friendly production facilities, through which the future viability of the PCC Group should be decisively strengthened. Certainly, the strategy of active investment portfolio management combined with ongoing portfolio optimization will be continued in the coming years. The primary objective remains a continuous and sustainable increase in enterprise value.
The business performance of the PCC Group in 2025 is also heavily dependent on future economic trends in Germany, Europe and the rest of the world. At the time of preparing this report, political representatives and various institutes and banks are predicting that economic output in Germany will grow only marginally in 2025, if at all. It should also be noted that these forecasts were made before the Bundestag (German parliament) resolution to adjust Germany’s “debt brake”. Possible effects of the USA’s latest tariff policy have also not been taken into account. Stronger growth is expected for the European Union and the global economy as a whole. In their latest forecasts for 2025, both the Deutsche Bundesbank (Germany’s central bank) and the Ifo Institute expect real gross domestic product (GDP) in Germany to grow by 0.2 %. The average growth rate of real GDP in the eurozone is projected to be 0.8 % in 2025. The International Monetary Fund (IMF) and the OECD are forecasting growth of of 2.8 % and 3.1 % respectively for the global economy in 2025. The US economy is expected to achieve growth of 2.2 % in 2025, despite mounting uncertainties. The US economy performed well in 2024 and GDP grew by 3 % or more in three of the four quarters. It should be noted, however, that all such forecasts are subject to considerable variation due to the ongoing Russia-Ukraine war and other international conflicts and political uncertainties, as well as the latest US tariff policy. Additional risks for the global economy as a whole could also arise from China’s Taiwan policy. OECD forecasts put economic growth in China at 4.8 % in 2025. This would once again be too low to stimulate domestic demand in China.
The adjustment to the “debt brake” resolved by the Bundestag in March 2025 will enable significant investments in the German economy, infrastructure, defense and future technologies. It is therefore reasonable to expect that the forecasts mentioned above will be revised upwards in the course of 2025. This should then also have a positive impact on the labor market.
The European Central Bank’s (ECB) deposit rate reached its most recent high of 4.00 % in September 2023 to combat inflation. Since June 2024, the ECB has begun to gradually reduce the interest rate. After seven steps of 25 basis points each to date, it currently stands at 2.25 %. In the wake of expected investments in the EU and Germany following the announcement of the packages of measures now planned, it remains to be seen how the ECB will react.
The current Group planning for the years 2025 to 2027, which was prepared between September and November 2024, assumes that sales in 2025 will be 5 – 10 % higher than in the previous year and should once again exceed the € 1 billion mark. This forecast is based on both higher sales volumes and higher selling prices in almost all business areas, driven by increasing utilization of existing capacities and the addition of new capacities in selected segments. In addition, the operating rate of our intermodal transport business is also expected to grow in the 2025 fiscal year thanks to additional routes and more frequent services.
The PCC Group is planning for earnings before interest, taxes, depreciation and amortization (EBITDA) before exceptional items to be 40 – 50 % higher than in 2024. The main drivers here are further loss reductions in the Silicon & Derivatives segment, continued growth in the Logistics segment and the utilization of new capacities in the Surfactants & Derivatives segment. Our budgeting for 2025 is based on energy costs remaining at a level comparable to that of the fourth quarter of 2024. We likewise expect expenses for personnel and external services, among other costs, to continue to rise in fiscal 2025, but to decrease in relation to sales, with higher volumes and selling prices generally assumed. With further increases in depreciation and amortization and high interest expenses, the PCC Group is planning for a loss before taxes, although this should be around 40 – 50 % lower than in fiscal 2024.
An increase in sales of between 10 – 15 % is anticipated for the Polyols & Derivatives segment. Despite intense competition from Chinese suppliers in the area of polyether polyols and feedstocks in general, we want to continue to defend our position in the market segment for specialty polyether polyols and thus to hold on to our market share. This should lead to EBITDA at the previous year’s level in the Polyols & Derivatives segment. In the Surfactants & Derivatives segment, PCC expects an increase in sales of 8 – 12 % compared to the previous year. We intend to achieve this primarily through capacity utilization of the new plant at our Polish production site in Płock. In particular, it will become increasingly possible to produce small volumes with higher margins there to meet specific customer demand. The Consumer Products business managed in this segment should also see a further increase in capacity utilization in 2025 due to persistently high demand for private label products, particularly in Eastern Europe. Sales growth and a simultaneous increase in EBITDA form the basis for our budgetary planning here.
The Chlorine & Derivatives segment is budgeting for an increase in sales of 1 – 5 % compared to the previous year. Due to the dependence on economic developments, this budgetary assumption is on the cautious side. The growth prospects for 2025 are similarly subdued in the Chlorine Downstream Products business unit as well as in the MCAA business unit and for phosphorus-based flame retardants. For Europe, this is mainly due to the low growth forecast in the EU. As further price declines are anticipated in the Chlorine Downstream Products business unit in particular, budgeting has been based on the expectation that EBITDA will be 25 – 30 % lower
than in fiscal 2024.
In the Silicon & Derivatives segment, budgeting for the production of silicon metal is based on further slight increases in volumes and a recovery in market prices in the second half of 2025. The planning assumes full-capacity operation throughout the year. However, the shortage of electricity supply since December 2024 had not been taken into account at the time the budget was drawn up. In light of this development, it will not be possible to meet the volume targets. Moreover, the planning for this segment assumes continued aggressive cost-cutting and savings. The improvement and efficiency program initiated in December 2024 is expected to deliver initial results from the second quarter of 2025. Raw material purchase prices are generally expected to come in lower than in the previous year. Some contracts were concluded in the past fiscal year and are already taking effect. Contracts with price escalation clauses will take effect with a slight time lag. With all these measures, the segment is expected to achieve sales growth of 10 – 15 % and an increase in EBITDA of 60 – 80 %. This means that a loss, albeit significantly reduced, is still forecasted at the end of the year. In order to bring the Silicon Metal business unit into the profit zone long-term, the price levels prevailing must be decoupled from Chinese dumping prices – silicon must be priced in line with the market in Europe. In fiscal 2025, the local Icelandic company will also have to be provided with further funding from PCC SE in order to compensate for the budgeted losses. Depending on market price developments, a temporary plant standstill cannot be ruled out.
Sales growth of 30 – 50 % is anticipated for the Trading & Services segment. This forecast is derived in roughly equal parts from volume- and price-related budgeting assumptions. In particular, the Commodity Trading business unit, sales activities in peripheral markets and the utility business are expected to contribute to this growth. The budget thus foresees an increase in EBITDA 20 – 30 %.
The Logistics segment plans in fiscal 2025 to build on the very good performance of 2024. Service frequencies, capacity utilization and container handling volumes are to be continually expanded or increased. Revenue is expected to increase by between 10 % and 20 %. Efficiency gains are planned through the expansion of transport services utilizing the segment’s own locomotives and platforms. Even before taking into account any positive effects arising from a peace plan in Ukraine and the associated increase in the flow of goods through Poland to Ukraine, PCC is budgeting for EBITDA growth of 30 – 40 % in this segment.
Based on a higher EBITDA of the PCC Group, pre-tax earnings should also experience an upturn. The planning assumptions are currently based on an improvement in EBT of 50 – 80 %, meaning there will still be a slight loss on an annualized basis. Depreciation, amortization and interest charges remain high and will increase as a result of new investments and further borrowings to finance them.
The planning assumptions were prepared on the basis of the known premises from the third and early fourth quarter of fiscal 2024. Any intensification of conflicts or wars, new conflicts, political unrest or trade wars could exert a negative impact on the guidance. By contrast, peace plans, stability in German and European energy policy, clear tariff strategies and protection of European industries could have a positive impact on the aforementioned. In addition, effects from the adjustment of the “debt brake” and the resulting significant investment packages have not yet been taken into account. Possible effects from the latest US tariff policy have likewise not been factored in.
For the following years 2026 and 2027, we expect the economic situation in Europe to recover. New investments, rising demand and new growth, for example in the construction sector, should then also lead to rising volumes and prices. Sales are expected to increase by a further 30 – 40 % in the following years. With lower cost increases flowing into the budgeting process, this should also lead to a sharp rise in earnings. Both EBITDA and earnings before taxes are expected to increase at rates in the high double-digit million euro range each year during this period. Depreciation and amortization charges will continue to increase as a result of the realization of further investments, with the latter contributing to additional sales and earnings potential as the years progress. PCC consistently strives to achieve the optimum mix between equity and borrowings when it comes to financing capital expenditures. For this reason, financial liabilities will also continue to increase in the budget plans for the years 2025 – 2027. However, with the anticipated greater rates of increase in EBITDA, the leverage ratio should move back to our target of 5.0. A beneficial drop in this key metric has already been factored into the budget for the 2025 fiscal year.
The finalization and further expansion of the capacities of the chemical production facilities in Poland, the turnaround in silicon metal production and the geographic expansion of core business areas in the USA are the strategic cornerstones of our budget planning going forward, with continuous efficiency improvements and cost savings in all business areas providing the underlying foundation.
Duisburg, April 29, 2025
PCC SE
The Executive Board
The business performance of the PCC Group in 2025 is also heavily dependent on future economic trends in Germany, Europe and the rest of the world. At the time of preparing this report, political representatives and various institutes and banks are predicting that economic output in Germany will grow only marginally in 2025, if at all. It should also be noted that these forecasts were made before the Bundestag (German parliament) resolution to adjust Germany’s “debt brake”. Possible effects of the USA’s latest tariff policy have also not been taken into account. Stronger growth is expected for the European Union and the global economy as a whole. In their latest forecasts for 2025, both the Deutsche Bundesbank (Germany’s central bank) and the Ifo Institute expect real gross domestic product (GDP) in Germany to grow by 0.2 %. The average growth rate of real GDP in the eurozone is projected to be 0.8 % in 2025. The International Monetary Fund (IMF) and the OECD are forecasting growth of of 2.8 % and 3.1 % respectively for the global economy in 2025. The US economy is expected to achieve growth of 2.2 % in 2025, despite mounting uncertainties. The US economy performed well in 2024 and GDP grew by 3 % or more in three of the four quarters. It should be noted, however, that all such forecasts are subject to considerable variation due to the ongoing Russia-Ukraine war and other international conflicts and political uncertainties, as well as the latest US tariff policy. Additional risks for the global economy as a whole could also arise from China’s Taiwan policy. OECD forecasts put economic growth in China at 4.8 % in 2025. This would once again be too low to stimulate domestic demand in China.
The adjustment to the “debt brake” resolved by the Bundestag in March 2025 will enable significant investments in the German economy, infrastructure, defense and future technologies. It is therefore reasonable to expect that the forecasts mentioned above will be revised upwards in the course of 2025. This should then also have a positive impact on the labor market.
The European Central Bank’s (ECB) deposit rate reached its most recent high of 4.00 % in September 2023 to combat inflation. Since June 2024, the ECB has begun to gradually reduce the interest rate. After seven steps of 25 basis points each to date, it currently stands at 2.25 %. In the wake of expected investments in the EU and Germany following the announcement of the packages of measures now planned, it remains to be seen how the ECB will react.
The current Group planning for the years 2025 to 2027, which was prepared between September and November 2024, assumes that sales in 2025 will be 5 – 10 % higher than in the previous year and should once again exceed the € 1 billion mark. This forecast is based on both higher sales volumes and higher selling prices in almost all business areas, driven by increasing utilization of existing capacities and the addition of new capacities in selected segments. In addition, the operating rate of our intermodal transport business is also expected to grow in the 2025 fiscal year thanks to additional routes and more frequent services.
The PCC Group is planning for earnings before interest, taxes, depreciation and amortization (EBITDA) before exceptional items to be 40 – 50 % higher than in 2024. The main drivers here are further loss reductions in the Silicon & Derivatives segment, continued growth in the Logistics segment and the utilization of new capacities in the Surfactants & Derivatives segment. Our budgeting for 2025 is based on energy costs remaining at a level comparable to that of the fourth quarter of 2024. We likewise expect expenses for personnel and external services, among other costs, to continue to rise in fiscal 2025, but to decrease in relation to sales, with higher volumes and selling prices generally assumed. With further increases in depreciation and amortization and high interest expenses, the PCC Group is planning for a loss before taxes, although this should be around 40 – 50 % lower than in fiscal 2024.
An increase in sales of between 10 – 15 % is anticipated for the Polyols & Derivatives segment. Despite intense competition from Chinese suppliers in the area of polyether polyols and feedstocks in general, we want to continue to defend our position in the market segment for specialty polyether polyols and thus to hold on to our market share. This should lead to EBITDA at the previous year’s level in the Polyols & Derivatives segment. In the Surfactants & Derivatives segment, PCC expects an increase in sales of 8 – 12 % compared to the previous year. We intend to achieve this primarily through capacity utilization of the new plant at our Polish production site in Płock. In particular, it will become increasingly possible to produce small volumes with higher margins there to meet specific customer demand. The Consumer Products business managed in this segment should also see a further increase in capacity utilization in 2025 due to persistently high demand for private label products, particularly in Eastern Europe. Sales growth and a simultaneous increase in EBITDA form the basis for our budgetary planning here.
The Chlorine & Derivatives segment is budgeting for an increase in sales of 1 – 5 % compared to the previous year. Due to the dependence on economic developments, this budgetary assumption is on the cautious side. The growth prospects for 2025 are similarly subdued in the Chlorine Downstream Products business unit as well as in the MCAA business unit and for phosphorus-based flame retardants. For Europe, this is mainly due to the low growth forecast in the EU. As further price declines are anticipated in the Chlorine Downstream Products business unit in particular, budgeting has been based on the expectation that EBITDA will be 25 – 30 % lower
than in fiscal 2024.
In the Silicon & Derivatives segment, budgeting for the production of silicon metal is based on further slight increases in volumes and a recovery in market prices in the second half of 2025. The planning assumes full-capacity operation throughout the year. However, the shortage of electricity supply since December 2024 had not been taken into account at the time the budget was drawn up. In light of this development, it will not be possible to meet the volume targets. Moreover, the planning for this segment assumes continued aggressive cost-cutting and savings. The improvement and efficiency program initiated in December 2024 is expected to deliver initial results from the second quarter of 2025. Raw material purchase prices are generally expected to come in lower than in the previous year. Some contracts were concluded in the past fiscal year and are already taking effect. Contracts with price escalation clauses will take effect with a slight time lag. With all these measures, the segment is expected to achieve sales growth of 10 – 15 % and an increase in EBITDA of 60 – 80 %. This means that a loss, albeit significantly reduced, is still forecasted at the end of the year. In order to bring the Silicon Metal business unit into the profit zone long-term, the price levels prevailing must be decoupled from Chinese dumping prices – silicon must be priced in line with the market in Europe. In fiscal 2025, the local Icelandic company will also have to be provided with further funding from PCC SE in order to compensate for the budgeted losses. Depending on market price developments, a temporary plant standstill cannot be ruled out.
Sales growth of 30 – 50 % is anticipated for the Trading & Services segment. This forecast is derived in roughly equal parts from volume- and price-related budgeting assumptions. In particular, the Commodity Trading business unit, sales activities in peripheral markets and the utility business are expected to contribute to this growth. The budget thus foresees an increase in EBITDA 20 – 30 %.
The Logistics segment plans in fiscal 2025 to build on the very good performance of 2024. Service frequencies, capacity utilization and container handling volumes are to be continually expanded or increased. Revenue is expected to increase by between 10 % and 20 %. Efficiency gains are planned through the expansion of transport services utilizing the segment’s own locomotives and platforms. Even before taking into account any positive effects arising from a peace plan in Ukraine and the associated increase in the flow of goods through Poland to Ukraine, PCC is budgeting for EBITDA growth of 30 – 40 % in this segment.
Based on a higher EBITDA of the PCC Group, pre-tax earnings should also experience an upturn. The planning assumptions are currently based on an improvement in EBT of 50 – 80 %, meaning there will still be a slight loss on an annualized basis. Depreciation, amortization and interest charges remain high and will increase as a result of new investments and further borrowings to finance them.
The planning assumptions were prepared on the basis of the known premises from the third and early fourth quarter of fiscal 2024. Any intensification of conflicts or wars, new conflicts, political unrest or trade wars could exert a negative impact on the guidance. By contrast, peace plans, stability in German and European energy policy, clear tariff strategies and protection of European industries could have a positive impact on the aforementioned. In addition, effects from the adjustment of the “debt brake” and the resulting significant investment packages have not yet been taken into account. Possible effects from the latest US tariff policy have likewise not been factored in.
For the following years 2026 and 2027, we expect the economic situation in Europe to recover. New investments, rising demand and new growth, for example in the construction sector, should then also lead to rising volumes and prices. Sales are expected to increase by a further 30 – 40 % in the following years. With lower cost increases flowing into the budgeting process, this should also lead to a sharp rise in earnings. Both EBITDA and earnings before taxes are expected to increase at rates in the high double-digit million euro range each year during this period. Depreciation and amortization charges will continue to increase as a result of the realization of further investments, with the latter contributing to additional sales and earnings potential as the years progress. PCC consistently strives to achieve the optimum mix between equity and borrowings when it comes to financing capital expenditures. For this reason, financial liabilities will also continue to increase in the budget plans for the years 2025 – 2027. However, with the anticipated greater rates of increase in EBITDA, the leverage ratio should move back to our target of 5.0. A beneficial drop in this key metric has already been factored into the budget for the 2025 fiscal year.
The finalization and further expansion of the capacities of the chemical production facilities in Poland, the turnaround in silicon metal production and the geographic expansion of core business areas in the USA are the strategic cornerstones of our budget planning going forward, with continuous efficiency improvements and cost savings in all business areas providing the underlying foundation.
Duisburg, April 29, 2025
PCC SE
The Executive Board
Dr. Peter Wenzel
Riccardo Koppe
Dr. rer. oec. (BY) Alfred Pelzer
