EQS-News: AT&S Austria Technologie & Systemtechnik AG: AT&S reports record revenue in a challenging market environment
EQS-News: AT&S Austria Technologie & Systemtechnik AG / Key word(s):
Annual Results
AT&S Austria Technologie & Systemtechnik AG: AT&S reports record revenue
in a challenging market environment
16.05.2023 / 07:01 CET/CEST
The issuer is solely responsible for the content of this announcement.
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AT&S reports record revenue in a challenging market environment
• Revenue for FY 2022/23 increases by 13% to € 1,791 million (PY:
€ 1,590 Mio. €)
• Adjusted EBITDA at € 470 million, up 24% on the previous year
• Outlook for FY 2023/24: Revenue between € 1.7 and 1.9 billion,
adjusted EBITDA margin of 25 to 29%
• New reporting structure since April 1, 2023
• Medium-term guidance for 2026/27 confirmed
Leoben – In a challenging market environment, AT&S continued its growth
course and generated record revenues in the financial year 2022/23. “After
a strong first half, the market cooled down significantly in the second
half of the financial year, in particular in the growth segment of IC
substrates. To address the resulting challenges, we significantly boosted
and accelerated our cost reduction programmes. We are still convinced that
the company is in a good and promising position in segments benefitting
substantially from digitalisation and electrification. And we are
achieving one of our key strategic goals, further diversification of our
customer base, even faster than planned,” CEO Andreas Gerstenmayer
comments on the company’s perspective. “I am particularly pleased about
the progress of our projects in Kulim and our research and development
centre in Leoben,” says Gerstenmayer.
Driven by the good development in the first half-year, consolidated
revenue improved by 13% to € 1,791 million in the financial year 2022/23
(PY: € 1,590 million). Adjusted for currency effects, consolidated revenue
rose by 3%. The strategy to broaden the application portfolio of mobile
devices and to promote the module printed circuit board business was a key
driver for the positive development. Moreover, the additional capacity for
IC substrates in Chongqing, China, also contributed to the success, in
particular in the first half of the year. As demand slowed down in this
segment in the second half of the year, the annual guidance had to be
adjusted downwards. In contrast, the Segment AIM (Automotive, Industrial,
Medical) maintained its positive revenue momentum, with the Automotive
segment recording the strongest percentage growth.
EBITDA rose by 19% from € 350 million to € 417 million. The improvement in
earnings is primarily attributable to the increase in consolidated
revenue. Currency fluctuations of the US dollar and the Chinese renminbi
had a positive influence of € 125 million on earnings. Lower demand in the
second half of the year, the start-up costs in Chongqing, China, and
Kulim, Malaysia, as well as Leoben, Austria, and higher material,
transport and energy costs had a negative impact on earnings. Research and
development expenditures were further increased to ensure that AT&S will
remain a leading innovation driver going forward.
Adjusted for start-up costs, EBITDA amounted to € 470 million (PY:
€ 378 million), which corresponds to an increase by 24%. Without currency
effects, adjusted EBITDA would have decreased by 9%, which is primarily
attributable to the weakness of the IC substrate market in the second half
of the year.
The EBITDA margin amounted to 23.3% (EBITDA margin adjusted for start-up
costs: 26.2%), thus exceeding the prior level of 22.0% (EBITDA margin
adjusted for start-up costs: 23.8%). Depreciation and amortisation
increased by € 47 million to € 270 million (15% of revenue) due to
additions to assets and technology upgrades. EBIT rose from € 126 million
to € 146 million. The EBIT margin amounted to 8.2% (PY: 8.0%). Finance
costs – net improved from € -4 million in the previous year to
€ 22 million primarily due to a change in currency effects on the high
level of cash and cash equivalents. Profit for the year increased from
€ 103 million to € 137 million, leading to an increase in earnings per
share by € 0.64 from € 2.39 to € 3.03.
The financial position as of March 31, 2023 was characterised by an
increase in non-current assets. Total assets rose to € 4,162 million, up
11% compared to March 31, 2022, primarily as a result of additions to
assets and technology upgrades as well as the inflow of liquid funds due
to bilateral agreements. Due to the high investment volume, the equity
ratio declined by 5.6 percentage points to 27.8%, thus falling below the
target of 30% at the balance sheet date.
Cash and cash equivalents declined to € 792 million (March 31, 2022:
€ 1,120 million). In addition, AT&S has unused credit lines of
€ 726 million to secure the financing of the future investment programme
and short-term repayments.
Key figures
Q4 Change FY FY Change
in € million Q4 2022/23 2021/22 in % 2022/23 2021/22 in %
Revenue 302 443 -32% 1,791 1,590 13%
EBITDA 0 106 -100% 417 350 19%
EBITDA adjusted^1) 17 116 -85% 470 378 24%
EBITDA margin (in %) 0.2 23.9 – 23.3 22.0 –
EBITDA margin adjusted 5.7 26.2 – 26.2 23.8 –
(in %)^1)
EBIT -67 44 – 146 126 16%
EBIT adjusted^1) -50 60 – 201 170 18%
EBIT margin (in %) -22.3 9.9 – 8.2 8.0 –
EBIT margin adjusted -16.6 13.5 – 11.2 10.7 –
(in %)^1)
Profit for the year -85 42 – 137 103 32%
ROCE (in %)^1) n.a. n.a. – 6.6 7.8 –
Net CAPEX 193 166 16% 996 602 66%
Cash flow from -7 381 – 476 713 -33%
operating activities
Earnings per share (in -2.29 0.97 – 3.03 2.39 27%
€)
Number of employees^2) – – – 15,280 13,046 17%
^1) Adjusted for start-up costs
^2) Incl. leased personnel, average. As at March 31, 2023: 14,504
Cost optimisation programmes initiated
In order to counter effects such as pressure on prices and inflation,
which result from the currently difficult market situation, AT&S has
significantly intensified and accelerated its previously initiated
comprehensive cost optimisation and efficiency programmes. Along with
market-based capacity adjustments, these cost optimisation programmes are
a key focus topic in these challenging times. Compared with the financial
year 2022/23, cost reductions totalling € 440 million are expected for the
following two years.
Customer diversification successfully started
As part of its diversification strategy, AT&S succeeded in winning
additional renowned IC substrate customers in the areas of computing/data
processing. The new customers will be supplied from the plant in Leoben.
The R&D centre in Leoben, which is currently under construction, will
therefore be expanded to include real series production with the help of
financial contributions from the new customers.
New reporting structure as of the first quarter of 2023/24
As of April 1, 2023, AT&S has reorganised the structure of its “Mobile
Devices & Substrates” and “Automotive, Industrial & Medical” segments. The
company’s new structure comprises the business units “Electronics
Solutions” and “Microelectronics” going forward. Reporting will therefore
be adjusted accordingly. Each business unit will be represented by a
member of the Executive Board. Peter Schneider will be responsible for the
“Electronics Solutions” segment and Ingolf Schröder for
“Microelectronics”. “Electronics Solutions” will bundle the printed
circuit board and module activities across the Group while
“Microelectronics” will focus on IC substrates.
The change will primarily be made for two reasons. The new structure will
support the strategic management of the company. In terms of content, the
former “Mobile Devices” segment is more closely related to the former
“Automotive, Industrial & Medical” business unit than to “Substrates”, so
that merging these segments will enhance synergy effects and strategic
management. The company is also responding to the interests of the capital
market. The new reporting format facilitates the comparison with
competitors in the respective business areas as well as monitoring the
company’s strategic development.
The company is aware that the results reported for “Microelectronics” will
be particularly strongly affected by the current challenging market
environment in the first quarters of the new reporting period.
Nevertheless, the decision was made to implement the change now to offer
the capital market maximum transparency regarding the current situation
and the undoubtedly positive further development.
Also effective April 1, 2023, Peter Griehsnig took over the role of Chief
Technology Officer, which was created to steer, coordinate and accelerate
research and development. Peter Griehsnig joined AT&S in 2001 AT&S and
worked for AT&S in Shanghai, China, since 2002.
Dividend proposal
The Management Board will propose a dividend of € 0.40 per share (PY:
€ 0.78 per share and a special dividend of € 0.12 per share) for the
financial year 2022/23 to the Annual General meeting on July 6, 2023.
Tensions between China and the United States
The tensions between Mainland China and Taiwan as well as the United
States of America increased significantly during the financial year
2022/23 and led to trade restrictions, in particular in the area of
state-of-the-art semiconductors. AT&S has so far not been affected by
these restrictions on the customer side, but monitors the current
developments carefully and closely coordinates with its customers. AT&S
had already decided in 2021 – before the tensions increased – to diversify
its production geographically and establish new capacities in Kulim and
Leoben.
Guidance 2023/24
Depending on the market development, AT&S will continue to push ahead the
investment project in Kulim and the expansion of the site in Leoben and
implement technology upgrades at other locations in the financial year
2023/24. In view of the highly volatile environment, the ongoing
investment projects will be reviewed at frequent intervals and adapted to
the respective current situation if required.
The expectations for AT&S’s segments are currently as follows: In the
markets for IC substrates, demand for notebooks in 2023 is expected to be
lower than in 2022. The negative impact on the supplier chain will be
aggravated by high inventory levels. According to current forecasts, this
will affect the first half of 2023 in particular, with a recovery of
demand anticipated towards the end of the year. Demand for IC substrates
for servers will benefit from the technology shift towards heterogeneous
integration[1][1] in the medium term.
In the area of mobile devices, the 5G mobile communication standard as
well as the module printed circuit board business will remain positive
drivers. In the Automotive segment, the semiconductor shortage should
continue to ease and the growth trend should consequently intensify as the
share of electronics per vehicle continues to increase. In the Industrial
and Medical segments, AT&S expects a continued positive development for
the current financial year.
As part of the strategic projects, the management is planning investments
totalling up € 800 million for the financial year 2023/24 depending on the
market environment and progress of projects. Roughly € 100 million are
budgeted for basic investments. Planned investments of approximately € 200
million in the financial year 2022/23 have been postponed to the financial
year 2023/24. As a result, the planned investment volume totals up to
€ 1.1 billion.
AT&S expects the deterioration of the market environment in the second
half of 2022/23, in particular in the market for IC substrates, to
continue in the first half of 2023/24. Continued high inflation rates,
rising interest rates, recession risks as well as geopolitical
developments represent additional elements of uncertainty for the end
markets. The company expects that inventories in the supply chains will
have normalised by the second half of 2023/24 and that demand picks up
again. This market forecast, combined with successful customer
diversification and the company’s constant high innovative strength, opens
up perspectives and opportunities that enable a positive development. In
this challenging environment, AT&S expects revenue in the range of € 1.7
to 1.9 billion. Not including effects from the start-up of the new
production capacities in Kulim and Leoben totalling approximately
€ 100 million, the adjusted EBITDA margin is expected to range between 25
and 29%.
Guidance 2026/27
The progress of the production capacity expansion in Kulim as well as the
expansion of the site in Leoben is still positive despite the challenging
global economic situation. The management is convinced that the major
trends – digitalisation and electrification – are intact. Therefore, AT&S
assumes that revenue of approximately € 3.5 billion will be generated in
the financial year 2026/27 and expects an EBITDA margin in the range from
27 to 32%. The management monitors the currently tense geopolitical
situation very carefully in order to be able to respond to developments at
any time and to make strategic adaptations. With the projects in Kulim and
Leoben, which were adopted in 2021, the company proved its vision and took
an important step towards diversifying its value added structure.
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft – Advanced
Technologies & Solutions
AT&S is a globally leading manufacturer of high-end printed circuit boards
and IC substrates. AT&S industrialises leading-edge technologies for its
core business segments Mobile Devices & Substrates, Automotive, Industrial
and Medical. AT&S has a global presence with production sites in Austria
(Leoben, Fehring) and plants in India (Nanjangud), China (Shanghai,
Chongqing) and Korea (Ansan near Seoul). A new high-end production site
for IC substrates is currently being established in Kulim, Malaysia. In
Leoben, a European competence centre including series production is being
built.
The company employs roughly 15,000 people. For further information please
visit [2] www.ats.net
Press contact
Gerald Reischl, Vice President Corporate Communications
Tel: +43 3842 200 4252; Mobile: +43 664 8859 2452; [3]g.reischl@ats.net
Investor Relations contact:
Philipp Gebhardt, Senior Director Investor Relations
Tel: +43 3842 200 2274; Mobile: +43 664 7800 2274; [4]p.gebhardt@ats.net
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft
Fabriksgasse 13
8700 Leoben / Austria
[5] www.ats.net
[6]^[1] Heterogeneous integration means that the different functionalities
of a single microchip are split up into chiplets, which reduces costs and
increases performance. However, this requires significantly larger and
more complex IC substrates to ensure the connection between the individual
chiplets.
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16.05.2023 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com
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Language: English
Company: AT&S Austria Technologie & Systemtechnik AG
Fabriksgasse 13
8700 Leoben
Austria
Phone: +43 (1) 3842200-0
E-mail: ir@ats.net
Internet: www.ats.net
ISIN: AT0000969985, AT0000A09S02
WKN: 922230
Indices: ATX
Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt,
Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange;
Vienna Stock Exchange (Official Market)
EQS News ID: 1633667
End of News EQS News Service
1633667 16.05.2023 CET/CEST
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