New FY22 and Q1 guidance announced Wacker announced full year results yesterday and released new guidance for FY22. Management pointed towards FY EBITDA of EUR1.2-1.5bn, in line with pre results consensus at the midpoint. The guidance factors in a EUR1bn headwind from energy/ raw materials and is inclusive of equity income from Siltronic. During the call, management also indicated that Q1 margins are likely be flat sequentially, implying group EBITDA close to EUR600m for the quarter. With pricing increases having been put through in Wacker''s Chemicals business and volumes recovering sequentially, Q1 earnings should receive significant support. Outlook looks conservative Management''s comments on Q1 and the FY imply a material deceleration in earnings for the remainder of 2022. Silicones will see significant overearning during Q1 due to pricing increases put through by Wacker and hedging on silicon metal cost. Once these hedges rollover, margins in should see some normalisation into Q2. However, even when taking this into account, guidance looks conservative with pricing remaining strong in polysilicon and polymers well positioned to combat further inflation. There are clear tail risks from geopolitical events but as we described in our earlier note Wacker could benefit in the long term as Europe looks to reduce reliance on Russian gas. CMD on March 29th the next catalyst Management will hold a CMD on 29th March in London. We expect the focus to be on capital allocation and strategy. This will be an important catalyst for the shares, in our view, with Wacker having ample balance sheet headroom and a relatively new CEO at the helm. Estimate changes We increase our FY22/23 EBTIDA estimates by 11% and 1% respectively, relating mainly to Silicones and Polymers. Our target price increases to EUR185 (from EUR175) based on our 2023 SOTP based valuation.