EQS-News: AT&S Austria Technologie & Systemtechnik AG / Key word(s):
Annual Results/Forecast
AT&S 2024/25 on growth course again
14.05.2024 / 07:01 CET/CEST
The issuer is solely responsible for the content of this announcement.
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AT&S 2024/25 on growth course again
• Revenue declines to € 1,550 million in FY 2023/24 (PY: € 1,791
million)
• Adjusted EBITDA margin of 24.8%
• IC substrate production in Kulim and Leoben to start at the end of FY
2024/25
• Outlook FY 2024/25: revenue € 1.7 to € 1.8 billion, adjusted EBITDA
margin 25 to 27%
• Intensification of efficiency programs leads to a reduction of up to
1,000 employees at the existing locations
• AI is an important growth driver of future business success
• Customer diversification continues successfully
• New plants in Kulim and Leoben will contribute to doubling revenue by
2026/27
Leoben – AT&S operated in a challenging market environment in the
financial year 2023/24. After a strong second quarter, demand was
relatively weak again in some market segments in the second half of the
financial year. The markets for mobile devices and industrial applications
softened significantly. While notebooks and PCs saw a slight recovery, the
market for servers slowed down further. “We see AT&S return to growth in
the new financial year 2024/25. The general market recovery expected in
our industry for the second half of the financial year 2024/25 should also
have a positive effect on demand and, consequently, utilization of our
existing plants. Business growth will be supported by the ramp-up of
high-volume production at our two new plants in Kulim and Leoben at the
end of the financial year. This will help us to further advance the
initiated diversification of the customer portfolio for IC substrates and
to address additional applications in the fields of data management and
AI. To counter price pressure in the industry, which is expected continue,
we have intensified our ongoing efficiency programs. In addition to many
other cost-cutting effects, a reduction of up to 1,000 employees will also
be implemented at the existing locations,” Gerstenmayer comments on the
company’s perspectives and challenges.
Compared with the record level of the previous year, consolidated revenue
declined by 13% to € 1,550 million in the financial year 2023/24 (PY:
€ 1,791 million). Adjusted for currency effects, consolidated revenue
decreased by 11%. This development was primarily driven by the fundamental
changes in the economic environment. Due to a less favorable product mix
and higher price pressure, revenue in the Electronics Solutions segment
fell short of the strong figures of the previous year. Revenue in the
Microelectronics segment declined slightly due to lower demand for
servers. In this challenging environment, AT&S was able to defend its good
market position.
EBITDA decreased by 26% from € 417 million to € 307 million in the
financial year 2023/24. The reduction in earnings is primarily
attributable to the decline in consolidated revenue. The negative effects
of the currently difficult market environment were in part mitigated by
the consistent implementation of the efficiency programs. As was the case
with revenue, both segments were unable to match the EBITDA figures of the
previous year. In the Electronics Solutions segment, EBITDA decreased by
32% to € 210 million (PY: € 310 million) due to lower revenue and a less
favorable product mix. In the Microelectronics segment, EBITDA declined by
17% from € 116 million to € 96 million for similar reasons as well as due
to higher start-up costs at the new plants in Kulim, Malaysia, and Leoben,
Austria.
Currency fluctuations had a positive influence of € 6.8 million on
earnings. Adjusted for start-up costs in Kulim and Leoben, EBITDA amounted
to € 384 million (PY: € 470 million), which corresponds to a decline by
18%.
The EBITDA margin amounted to 19.8% (EBITDA margin adjusted for start-up
costs: 24.8%), thus falling short of the prior-year level of 23.3% (EBITDA
margin adjusted for start-up costs: 26.2%).
Depreciation and amortization increased by € 5.9 million to € 276 million
(17.8% of revenue) due to additions to assets and technology upgrades.
EBIT declined from € 146 million to € 31 million. Finance costs – net fell
from € 22 million in the previous year to € -50 million primarily due to
changes in currency effects on cash and cash equivalents. Profit for the
year decreased from € 137 million to € -37 million, leading to a decline
in earnings per share, after interest for hybrid capital, by € 4.42 from
€ 3.03 to € -1.39.
Key figures
Q4 Change FY FY Change
in € million Q4 2023/24 2022/23 in % 2023/24 2022/23 in %
Revenue 345 302 +14% 1.550 1.791 -13%
EBITDA 39 0.5 >+100% 307 417 -26%
EBITDA adjusted^* 63 17 >+100% 384 470 -18%
EBITDA margin (in %) 11.3 0.2 - 19.8 23.3 -
EBITDA margin adjusted 18.2 5.7 - 24.8 26.2 -
(in %)^*
EBIT -33 -67 - 31 146 -79%
EBIT adjusted^* -7 -50 -95% 113 201 -53%
EBIT margin (in %) -10 -22 - 2.0 8.2 -
EBIT margin adjusted -2 -17 - 7.2 11.2 -
(in %)^*
Profit/loss for the -44 -85 - -37 137 -
period
ROCE (in %)^* n.a. n.a. - 0.6 6.6 -
Net CAPEX 156 193 -19% 855 996 -14%
Cash flow from 159 -7 - 653 476 +37%
operating activities
Earnings per share (in -1.25 -2.29 - -1.39 3.03 -
€)
Number of employees^** 13,549 14,991 -10 % 13,828 15,280 -10%
^* Adjusted for start-up costs
^** Incl. leased personnel, average. As at March 31, 2024: 13,507
The asset and financial position as of March 31, 2024 was still
characterized by investing activities and the related financing
activities. Compared with March 31, 2023, total assets rose by 12% to
€ 4,675 million due to additions to assets. The equity ratio declined by
7.1 percentage points to 20.7% due to the negative result for the year
attributable to shareholders, the high investment volume and negative
foreign exchange effects in other comprehensive income (OCI).
Cash and cash equivalents declined to € 676 million (March 31, 2023:
€ 792 million). In addition, AT&S has unused credit lines of € 582 million
to secure the financing of the future investment program and short-term
repayments.
Strategic decisions of May 10, 2024
Given the currently volatile market environment, the Management Board of
AT&S has decided not to conduct a capital increase for the time being.
Talks with potential investors were ended.
In order to further sharpen the Group’s profile, AT&S intends to sell the
plant in Ansan, Korea, which primarily serves the medical market. The
company has therefore decided to request binding offers for the sale. From
a Group perspective, revenue of this company amounted to € 76 million in
the financial year 2023/24 (PY: € 64 million) and EBITDA to € 38 million
(PY: € 28 million). Property, plant and equipment totaled € 37 million
(PY: € 38 million) in the financial year 2023/24. Based on non-binding
offers obtained and strong interest in the transaction, AT&S will now
request binding offers. Depending on the resulting conditions, the
Management Board will make further decisions in the coming months.
Against the backdrop of the currently challenging market environment and
the ongoing investment programs, the Management Board will propose to the
Annual General Meeting on July 4, 2024, subject to the consent of the
Supervisory Board, not to pay a dividend for the financial year 2023/24
(PY: € 0.40 per share).
Expected market environment
The expectations for AT&S’s segments are currently as follows: In the area
of mobile devices, where overall market conditions are weak, demand is
expected to recover only slightly; this segment will remain a challenge
for AT&S. In contrast, the module printed circuit board business continues
to develop positively.
Although the PCB market in the automotive segment is currently under
pressure due to higher inventory levels in the supply chain, among other
things, it is subject to a growth trend in the medium term, as the
electronic content per vehicle continues to increase. In the Industrial
segment, a slight recovery of the market is expected in 2024.
The market for notebooks is generally volatile and subject to significant
quarterly fluctuations. In the markets for IC substrates, demand for
notebooks in 2024 is expected to be slightly higher than in 2023. This
should lead to higher demand for IC substrates since inventories have now
normalized.
Since a growing share of investments in the server market is currently
directed towards high-priced products focused on artificial intelligence,
the reduction of inventories is proceeding more slowly than initially
expected. Inventory levels should have normalized by the second half of
the financial year 2024/25, and demand for server products is expected to
pick up again. The most recent order planning of AT&S’s main customers
also indicates such a development. Due to the expected change in
architecture, the product mix should continue to change, with the trends
towards technologically higher-end IC substrates also expected to
continue; AT&S will benefit from this trend.
Outlook 2024/25
Some of the industries served by AT&S have stabilized over the past
months. On this basis, demand is expected to recover in terms of volume,
in particular in the second half of the financial year 2024/25.
Nevertheless, the company assumes that strong price pressure will
continue. The consistent implementation of and further focus on the
already ongoing efficiency programs are intended to counter this pressure.
In addition to comprehensive cost-cutting measures, a reduction of up to
1,000 employees will be implemented at the existing locations.
After the high investments of € 996 million in 2021/22 and € 855 million
in 2022/23, net capex will decline significantly in the coming years. The
management is planning investments of roughly € 500 million for the
financial year 2024/25 depending on the market environment and progress of
projects. The majority of these investments will be used for the IC
substrate production at the new plants in Kulim and Leoben. With the start
of high-volume production at the two plants at the end of the financial
year 2024/25, AT&S will continue to further differentiate its customer
base for IC substrates.
AT&S expects to generate annual revenue in the range of € 1.7 to
€ 1.8 billion in the financial year 2024/25[1][1]. Excluding effects from
the start-up of the new production capacities in Kulim and Leoben
amounting to roughly € 80 million, the adjusted EBITDA margin is expected
to range between 25 and 27%.
Guidance 2026/27
“AT&S will grow with AI,” says AT&S-CEO Andreas Gerstenmayer. “We also
supply the right technology for AI, from substrates for AI processors to
efficient energy management solutions for IT infrastructure such as
servers and data centers.” AT&S is also a sought-after technology partner
for on-device AI, where devices such as smartphones and notebooks are
equipped with AI functionalities. AMD, one of the global market leaders in
the semiconductor sector, was won as a customer in this segment, and
another three new renowned US technology customers have also specialized
in AI solutions and rely on AT&S technology. Gerstenmayer: “Over the
years, AT&S has established itself as a technology partner in industry and
among customers. Our customers value our innovative strength, reliability
and solution focus. This is why we regularly succeed in winning new
customers for different, leading-edge applications.”
The production capacity expansion in Kulim and the expansion of the site
in Leoben are still developing positively despite the challenging global
economic situation. Nevertheless, AT&S had to adjust its guidance for the
financial year 2026/27 on May 10, 2024 due to the most recent market
forecasts. AT&S now assumes that revenue of approximately € 3.1 billion
will be generated in the financial year 2026/27^1 (previously:
€ 3.5 billion), but still expects an EBITDA margin of 27 to 32%. This
forecast does not include potential revenue from the second plant built by
AT&S in Kulim. 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.
[2]^[1] Refers to the current company structure, including the plant in
Ansan, Korea
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14.05.2024 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: 1902039
End of News EQS News Service
1902039 14.05.2024 CET/CEST
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