EQS-News: AT&S Austria Technologie & Systemtechnik AG / Key word(s):
Quarter Results
AT&S records slight upward trend in the first quarter
01.08.2024 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
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AT&S records slight upward trend in the first quarter
• Revenue in Q1 2024/25 increases 1% to € 349 million compared to Q4
2023/24 (€ 345 million) and is 3% lower than in the prior-year quarter
(Q1 2023/24: € 362 million)
• Adjusted EBITDA of € 97 million corresponds to a margin of 27.6%
• Guidance for FY 2024/25 and 2026/27 confirmed
Leoben – “As expected, we are still operating in a difficult market
environment where forecasts keep changing. The market is recovering as
projected, but the recovery is slower than anticipated. We expect the
situation to stabilize towards the end of the current financial year,” CEO
Andreas Gerstenmayer outlines the situation and emphasizes that the
company is preparing for continuing price pressure. “Thanks to the timely
intensification of our efficiency and cost optimization programs and the
progressing customer diversification, we were able to increase revenue
slightly over the previous quarter, while EBITDA even rose by 63%. This
upward trend confirms the ongoing transformation process on which we
continue to work very hard.”
“We are convinced that AT&S is well positioned in market segments
benefiting greatly from digitalization and electrification, and that
artificial intelligence will bring further opportunities. To that effect,
we are swiftly driving our projects in Kulim and Leoben forward and are
highly satisfied the progress achieved,” Gerstenmayer outlines the
company’s perspectives and announces: “We will start production at the two
new plants in Malaysia and Austria in the current financial year and
position our global IC substrate triangle Chongqing-Kulim-Leoben in line
with market requirements,” Gerstenmayer explains.
In comparison with the same quarter of the previous year, consolidated
revenue declined by 3% to € 349 million (PY: € 362 million) in the first
quarter of 2024/25. Adjusted for currency effects, consolidated revenue
decreased by 4%. This decline was primarily driven by strong price
pressure both for printed circuit boards and IC substrates, which AT&S had
already been confronted with in the second half of the previous year.
EBITDA declined by 14% from € 75 million to € 65 million. The reduction in
earnings is primarily attributable to the increase in price pressure. In
order to counter the effects from the currently difficult market
environment, such as price pressure and inflation, AT&S continued to
consistently implement its comprehensive cost optimization and efficiency
program. In addition to price pressure, the start-up costs in Kulim,
Malaysia, and Leoben, Austria, as well as costs related to the cost
optimization and efficiency program had a negative impact on earnings.
Adjusted for these costs, EBITDA amounted to € 97 million (PY:
€ 92 million), which corresponds to an increase by 4%.
The EBITDA margin amounted to 18.5% (adjusted EBITDA margin: 27.6%),
falling short of the reported prior-year level of 20.7% (adjusted EBITDA
margin: 25.5%).
Depreciation and amortization increased by € 6 million to € 73 million
(21% of revenue) due to additions to assets and technology upgrades. EBIT
declined from € 8 million to € -8 million. The EBIT margin amounted to
-2.3% (PY: 2.3%). Finance costs – net fell from € -5 million in the
previous year to € -20 million primarily due to higher interest expenses.
This development was largely driven by a significant increase in financial
liabilities and the related finance costs. The loss for the period fell
from € -2 million to €-34 million, leading to a decline in earnings per
share by € 0.81 from €-0.18 to € -0.99.
The seasonally weak cash flow from operating activities amounted to
€ 14 million in the first quarter of 2024/25, down 94% on the previous
year. The exceptionally good prior-year value benefited, on the one hand,
from working capital optimizations totaling roughly € 115 million and, on
the other hand, from higher payments related to the communicated major
projects, which declined by approximately € 85 million year-on-year as
planned. Based on the current planning, the company expects a seasonally
significantly higher cash flow from operating activities of approximately
€ 70 million^1 in the second quarter of 2024/25.
Key figures
in million Q1 2024/25 Q1 2023/24 Change in %
Revenue 349 362 -3%
EBITDA 65 75 -14%
EBITDA adjusted^1) 97 92 4%
EBITDA margin (in %) 18.5 20.7 -
EBITDA margin adjusted (in %)^1) 27.6 25.5 -
EBIT -8 8 -196%
EBIT adjusted^1) 26 27 -1%
EBIT margin (in %) -2.3 2.3 -
EBIT margin adjusted (in %)^1) 7.6 7.3 -
Profit/loss for the period -34 -2 >200%
ROCE (in %)^1) -2.4 0.5 -
Net CAPEX 93 272 -66%
Cash flow from operating activities 14 229 -94%
Earnings per share (in €) -0.99 -0.18 >200%
Number of employees^2) 13,573 14,111 -4%
^1) Adjusted for start-up and restructuring costs
^2) Incl. leased personnel, average. As at June 30, 2024: 13,512
The asset and financial position as of June 30, 2024 was still
characterized by investing activities and the related financing
activities. Total assets declined, mainly due to market-driven adaptations
to capacity expansions. As a result of the transfer of assets ordered by a
customer, total assets decreased by 1% compared to March 31, 2024 and
amounted to € 4,636 million, despite additions to assets. The transfer of
assets also led to a reduction in financial liabilities and the
outstanding repayment volume of € 95 million in the financial year
2024/25. The equity ratio decreased by 0.4 percentage points to 20.3% due
to the negative result for the period attributable to shareholders and the
high investment volume
Cash and cash equivalents increased to € 691 million (March 31, 2024:
€ 676 million). In addition, AT&S has unused credit lines of € 432 million
to secure the financing of the future investment program and short-term
repayments.
Expected market environment
After the extreme fluctuations of the past quarters, volume has already
stabilized in some business segments. A continuous increase in demand can
be expected in the medium to long term as the implementation of the key
business drivers, i.e. digitalization and electrification, continues to
progress. In the short term, seasonal effects will contribute to the
recovery.
The expectations for AT&S’s individual segments are currently as follows:
In the area of mobile devices, new AI applications give rise to optimistic
forecasts. Despite the slight recovery anticipated for mobile devices, the
market in the printed circuit board segment will remain challenging due to
persisting price pressure. The module printed circuit board business will
continue to develop positively.
Although the PCB market is currently still under pressure in this area,
among other things due to higher inventory levels in the supply chain and
due to weak demand for e-mobility, it promises a growth trend in the
medium term as the electronic content per vehicle continues to increase.
In the industrial segment, the market is expected to stagnate at the week
level of the previous year in 2024.
The market for notebooks is generally subject to quarterly fluctuations.
In the markets for IC substrates, demand for notebooks in 2024 is expected
to be higher than in 2023. This should lead to higher demand for IC
substrates since inventories have now normalized. However, price pressure
will continue.
Since a high 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, further positive changes in product mix are anticipated,
with the trends towards technologically higher-end IC substrates also
expected to continue; AT&S will benefit from this trend.
Outlook 2024/25
Based on the stabilization on the volume side, demand is expected to
recover, 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 2022/23 and € 855 million
in 2023/24, net capex will decline significantly in the coming years. The
management is still 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, revenue effects from the successful
diversification of the customer base for IC substrates will increasingly
show an impact. The significant capacity increase as a result of the two
new plants is already attracting interest and visitors have regularly been
impressed by the two new plants. Based on the positive reputation gained
as a high-tech supplier, interest in the additionally created capacity is
also increasing among existing and potential new customers.
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)^and thus confirms the
outlook for the current financial year. Excluding effects from the
start-up of the new production capacities in Kulim and Leoben as well as
one-off costs from the implementation of the cost optimization and
efficiency program (including redundancy costs) of up to € 88 million, the
adjusted EBITDA margin is expected to range between 25 and 27%.
Guidance 2026/27
The production capacity expansion in Kulim and the expansion of the site
in Leoben are still developing positively despite the currently
challenging global economic situation. AT&S assumes that revenue of
approximately € 3.1 billion will be generated in the financial year
2026/27^1 and 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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01.08.2024 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: 1958629
End of News EQS News Service
1958629 01.08.2024 CET/CEST
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