AT&S’s recovery continues

 

AT&S’s recovery continues

 

• Revenue in the second quarter of 2023/24 at € 452 million, up 25% on the preceding quarter, but still down 20% on the prior-year quarter (Q2 2022/23: € 567 million; Q1 2023/24: € 362 million)
• Adjusted EBITDA margin of 30.6% only slightly below previous year
• Guidance for FY 2023/24 and 2026/27 confirmed

 

 

Leoben –

AT&S maintained a solid performance in a continuously volatile market environment in the first half of the financial year 2023/24. “Although the economic environment has changed fundamentally compared to last year and we have been confronted with many challenges, we have been able to continue the recovery shown at the beginning of the financial year,” says AT&S CEO Andreas Gerstenmayer and explains, “We introduced efficiency and cost optimisation programmes in a timely manner. Not only are these measures taking effect faster than planned, they have also significantly improved the earnings situation.”

Gerstenmayer sees positive trends for the future: “Even though we expect market volatility to continue for the time being, the major trends regarding digitalisation and electrification remain intact and offer AT&S clear growth opportunities.”

 

In comparison with the strong prior-year period, consolidated revenue declined by 24% to € 814 million in the first half of 2023/24 (PY: € 1,070 million). Adjusted for currency effects, consolidated revenue fell by 21%. This development was primarily driven by the fundamental changes in the economic environment. However, within the first half of the financial year, a significant increase was recorded in both segments: compared with the first quarter, revenue in the second quarter rose by 30% in the Electronics Solutions segment and by 18% in the Microelectronics segment.

 

EBITDA decreased by 31% from € 315 million to € 217 million in the first half of the year. The reduction in earnings is primarily attributable to the decline in consolidated revenue. In order to counter effects such as price pressure and inflation, which result from the currently difficult market situation, AT&S already initiated comprehensive cost optimisation and efficiency programmes in the past financial year. These programmes already made a higher contribution in the first half of the financial year 2023/24 than originally planned. As was the case with revenue, both segments also significantly improved EBITDA within the first half of the financial year. EBITDA in the Electronics Solutions segment increased by 119% to € 89 million in the second quarter (Q1 2023/24: € 41 million) due to higher revenue and a better product mix. In the Microelectronics segment, EBITDA was up 43% on the first quarter from € 35 million to € 50 million for similar reasons.

 

Currency fluctuations had a positive influence of € 15 million on earnings. Adjusted for start-up costs in Kulim, Malaysia, and Leoben, Austria, EBITDA amounted to € 249 million (PY: € 335 million), which corresponds to a decrease by 26%.

 

The EBITDA margin amounted to 26.6% (EBITDA margin adjusted for start-up costs: 30.6%), thus falling short of the prior-year level of 29.5% (EBITDA margin adjusted for start-up costs: 31.3%). The margin was supported by the cost optimisation and efficiency programmes and once again by the positive development in the Medical segment – a sector for which AT&S is currently assessing strategic options. Depreciation and amortisation increased by € 0.9 million to € 135 million (16.6% of revenue) due to additions to assets and technology upgrades. EBIT fell from € 181 million to € 82 million. Finance costs – net declined from € 66 million in the previous year to € -18 million primarily due to a change in currency effects on cash and cash equivalents. Profit for the period declined from € 224 million to € 49 million, leading to a decline in earnings per share by € 4.50 from € 5.52 to € 1.02.

 

The financial position as of September 30, 2023 is still characterised by investing activities and the associated financing activities. Total assets increased to € 4,317 million due to additions to assets, up 4% compared to the balance sheet date March 31, 2023. Despite the positive profit for the period, the equity ratio decreased by 2.1 percentage points to 25.7% as a result of the high investment volume and due to negative foreign exchange effects in other comprehensive income (OCI).

 

Cash and cash equivalents declined to € 712 million (March 31, 2023: € 792 million). In addition, AT&S has unused credit lines of € 623 million to secure the financing of the future investment programme and short-term repayments.

 

Key figures

in € million	Q2 2023/24	Q2 2022/23	Change in %		H1 2023/24	H1 2022/23	Change in %
Revenue	452	567	-20%		814	1,070	-24%
EBITDA	142	178	-20%		217	315	-31%
EBITDA adjusted*	157	190	-18%		249	335	-26%
EBITDA margin (in %)	31.3	31.4	–		26.6	29.5	–
EBITDA margin adjusted (in %)*	34.7	33.6	–		30.6	31.3	–
EBIT	73	108	-32%		82	181	-55%
EBIT adjusted*	89	121	-26%		116	202	-65%
EBIT margin (in %)	16.2	19.1	–		10.0	16.9	–
EBIT margin adjusted (in %)*	19.7	21.4	–		14.2	18.9	–
Profit for the period	51	128	-60%		49	224	-78%
ROCE (in %)*	n.a.	n.a.	–		6.4	19.5	–
Net CAPEX	245	213	-15%		517	490	6%
Cash flow from operating activities	112	160	-30%		341	366	-7%
Earnings per share (in €)	1.20	3.17	-62%		1.02	5.52	-81%
Number of employees**	13,854	15,727	-12%		13,982	15,309	-9%

^* Adjusted for start-up costs

^** Incl. leased personnel, average. As at September 30, 2023: 13,741

 

Outlook 2023/24

Depending on the market development, AT&S will continue to push ahead the investment projects 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. Servers saw a slump at the beginning of the year caused by the economic situation, with a recovery expected in the short term so that the prior-year level should be exceeded as early as the second half of 2024.

 

In the area of mobile devices, where overall market conditions are weak, the module printed circuit board business will remain a positive driver for AT&S. While the Automotive segment is subject to a growth trend as the electronic content per vehicle is increasing, the PCB market is under price pressure. In the Industrial segment, the market is expected to decline this year.

 

The management is planning investments totalling up to € 1.1 billion for the financial year 2023/24 depending on the market environment and progress of projects.

 

AT&S expects the market environment to remain challenging with continued price pressure in the second half of 2023/24, and persisting high volatility and low visibility. High inflation rates, rising interest rates, recession risks as well as geopolitical developments continue to represent additional elements of uncertainty for the end markets.

 

In this challenging environment, AT&S expects annual revenue between € 1.7 and 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 and the expansion of the site in Leoben is still positive despite the challenging global economic situation. 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.

 

 

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft – Advanced Technologies & Solutions

AT&S is a globally leading manufacturer of high-end IC substrates and printed circuit boards. AT&S industrialises
leading-edge technologies for its core business segments IC Substrates, Mobile Devices, Automotive & Aerospace, 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 14,000 people. For further information please visit www.ats.net

 

 

Press contact:

Gerald Reischl, Vice President Corporate Communications

Tel: +43 3842 200 4252; Mobile: +43 664 8859 2452; g.reischl@ats.net

 

Investor Relations contact:

Philipp Gebhardt, Senior Director Investor Relations

Tel: +43 3842 200 2274; Mobile: +43 664 7800 2274; p.gebhardt@ats.net

 

 

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft

Fabriksgasse 13
8700 Leoben / Austria
www.ats.net