Q1-Q3 2014: AT&S reports significant increase in earnings and improved outlook for the full year 2014/15

Published On: January 26, 20154.6 min read915 words
  • Revenue of EUR 489.4 million, up 8.5% on prior-year figure
  • EBITDA up 27.1% to EUR 127.3 million
  • EBITDA margin improved from 22.2% to 26.0%
  • Profit for the period increased by 65.4% to EUR 50.3 million
  • Earnings per share: EUR 1.29 (vs. EUR 1.08 in Q1-Q3 2013/14)
  • Outlook for 2014/15 improved: revenue of EUR 623-633 million and EBITDA margin between 23% and 24%  expected

In a market environment characterised by strong seasonality, the leading printed circuit board producer AT&S significantly improved the relevant key financial indicators in the first three quarters of the financial year 2014/15. “The third quarter is traditionally one of the strongest for AT&S. Based on exceptionally strong Christmas business with mobile devices and a continuously positive development in the Industrial, Automotive and Medical segments, the resulting full capacity utilisation and a nearly optimal product mix, we have accomplished one of our best quarterly results to date”, says CEO Andreas Gerstenmayer.

Higher revenue despite limited capacity

In the first nine months of the financial year 2014/15 (1 April – 31 December 2014), AT&S recorded revenue of EUR 489.4 million, which corresponds to an increase by 8.5% compared with the prior-year figure of EUR 450.9 million. Andreas Gerstenmayer: “Despite very high capacity utilisation we managed to increase our output significantly once again by optimising the planning and management of production and logistics processes.”

Significant increase in earnings

Based on ongoing high capacity utilisation, a further improved product mix, a successful cost management and positive currency translation effects of EUR 4.7 million, the earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 27.1% to EUR 127.3 million. The EBITDA margin reached a record level of 26.0% in the reporting period (Q1-Q3 2013/14: 22.2%).

Due to the high operating earnings power, the profit for the period rose by 65.4% to EUR 50.3 million in the reporting period. Similarly, basic earnings per share increased by 19.4% from EUR 1.08 to EUR 1.29 despite a higher number of shares outstanding than in the comparative period.

Cash flows and statement of financial position

In the first three quarters cash flows from operating activities amounted to EUR 95.4 million, up 16.2% on the prior-year figure (EUR 82.1 million). The higher profit for the period made a significant contribution to this increase.

Cash flows from investing activities rose to EUR -130.4 million in the first three quarters of 2014/15 (Q1-Q3 2013/14: EUR -69.9 million. This is above all, particularly attributable to the plant in Chongqing, which is currently under construction.

Consolidated equity as at 31 December 2014 was EUR 502.8 million, which corresponds to an improvement by 28.7% compared with the prior-year balance sheet date and is due to both the increase in profit for the period and to positive currency translation differences amounting to EUR 71.9 million. The equity ratio was 45.8% as at 31 December 2014 vs. 42.7% as at 31 March 2014.

Net debt rose by EUR 42.8 million to EUR 153.7 million at the end of the reporting period, which corresponds to a gearing ratio of 30.6% (31 March 2014: 28.4%).

The figures in detail:

in accordance with IFRS; EUR in millionsQ1-Q3 2014/15Q1-Q3 2013/14Change
01.04.2014 – 31.12.201401.04.2013 – 31.12.2013
Revenue489.4450.9+ 8.5%
Gross profit117.193.6+ 25.1%
EBITDA127.3100.1+ 27.1%
EBITDA margin (in %)26.0%22.2 %-
EBIT70.843.5+ 62.9%
EBIT margin (in %)14.5%9.6%-
Profit before tax66.434.4+ 93.0%
Profit for the period50.330.4+ 65.4%
Earnings per average number of shares outstanding (in EUR)1)1.291.08+ 19.4%
Weighted average number of shares outstanding (in 1,000 units)38,8528,193+ 37.8%

1) Higher earnings despite an increased number of shares resulting from issue of new shares and the sale of xxTreasury Shares in September and October 2013. With the same number of shares as in the comparative period, earnings per share would amount to EUR 1.79.

Business Unit Mobile Devices & Substrates with above-average performance

The Business Unit Mobile Devices & Substrates, which currently accounts for 56.7% of the Group’s revenue, increased revenue by 10% in the first three quarters, from EUR 252.3 million to EUR 277.6 million. This development is primarily attributable to a higher-grade product mix and positive effects from currency translation. AT&S was able to use the momentum with several product launches in Q3 and consolidated and expanded its good positioning in the high-end segment of mobile communications.  

Business Unit Industrial & Automotive (incl. Medical) with further revenue growth

The Business Unit Industrial & Automotive (incl. Medical) achieved an increase in revenues of 7.5% to EUR 210.2 million in the reporting period. The main drivers in the automotive segment were Advanced Driver Assistance Systems (ADAS) such as lane change assistants. In the industrial sector, AT&S increased supply for solutions supporting higher sensor requirements related to industry 4.0 applications. In the medical segment, demand for mobile patient monitoring applications largely accounted for the increased revenue.

Establishment of IC substrate plant Chongqing on schedule – start ramp scenarios

The establishment of the plant in Chongqing with a strategic focus on the production of IC substrates (integrated circuit substrates) is proceeding according to plan. The equipment characterisation and certification for the first production line, which has already been installed, was continued in Q3. Moreover, the project has entered another phase of realisation and the negotiations about the product mix and the ramp scenarios have begun. The Management Board expects the negotiations to be concluded in the coming months.

As at 31 December 2014, AT&S invested EUR 171.7 million in additions to tangible fixed assets in Chongqing.

Outlook for the financial year 2014/15 is improved

The management expects a normal seasonal development with reduced, yet good demand for mobile devices for the fourth quarter and continued strong demand in the Industrial, Automotive and Medical segments.

Based on the positive business development of the first nine months and taking into account the seasonality in the Mobile Devices & Substrates segment in the fourth quarter, and provided that the macroeconomic environment and the current exchange rates remain stable, the Management Board increases the outlook for the financial year 2014/15 and expects revenue amounting to EUR 623-633 million (previous year: EUR 589.9 million). This is equivalent to an increase by 6-7%. The EBITDA margin is expected to be in the range of 23% and 24% (previous year: 21.6%), thus significantly exceeding the target corridor of 18-20%.