Earnings Release • Aug 3, 2021
Earnings Release
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| Unit | Q1 2020/21 | Q1 2021/22 | Change in % |
|
|---|---|---|---|---|
| Revenue | € in millions | 247.9 | 317.7 | 28.2% |
| EBITDA | € in millions | 39.5 | 46.3 | 17.3% |
| EBITDA adjusted1) | € in millions | 40.8 | 50.8 | 24.4% |
| EBITDA margin | % | 15.9% | 14.6% | – |
| EBITDA margin adjusted1) | % | 16.5% | 16.0% | – |
| EBIT | € in millions | 0.2 | (0.4) | – |
| EBIT adjusted1) | € in millions | 1.6 | 5.6 | >100% |
| EBIT margin | % | 0.1% | (0.1%) | – |
| EBIT margin adjusted1) | % | 0.7% | 1.8% | – |
| Loss for the period2) | € in millions | (7.9) | (5.3) | – |
| ROCE2) | % | (0.8%) | (0.6%) | – |
| Net CAPEX | € in millions | 81.9 | 153.4 | 87.4% |
| Operating free cash flow | € in millions | (53.8) | (122.9) | – |
| Earnings per share2) | € | (0.26) | (0.19) | – |
| Employees3) | – | 10,587 | 12,296 | 16.1% |
1) Adjustment start-up costs Chongqing
2) Q1 2020/21: Adjustment Hedge Accounting
3) Incl. contract staff, average
AT&S started the new financial year with a very positive revenue development despite negative currency effects. Digitalisation continues to drive the demand for AT&S technologies. Markets that showed temporary weakness are increasingly recovering. Strategically, AT&S is still fully on track. The production of IC substrates in particular is running at full speed. The implementation of the capacity expansion in Chongqing is making excellent progress. The first parts of the production equipment have already been qualified and put into operation.
With revenue amounting to € 317.7 million, the comparative value of the previous year of € 247.9 million was exceeded by 28.2%. Adjusted for currency effects, the increase in consolidated revenue even amounted to 37.2%. The additional capacity and growing demand for ABF substrates made a significant contribution to revenue growth. The development was supported by the broader application portfolio for mobile devices and the demand for module printed circuit boards. In the AIM segment, all three areas contributed to revenue growth. Although the Automotive segment nearly doubled its revenue after a very weak first quarter of the previous year, the shortage of semiconductors will continue.
Exchange rate effects, especially related to the weaker US dollar, had a negative impact of € 22.4 million on the development of revenue.
EBITDA increased from € 39.5 million to € 46.3 million. The improvement in earnings is predominantly attributable to the increase in consolidated revenue. Currency fluctuations of the US dollar and the Chinese renminbi had a negative impact of € 18.1 million on the earnings development. In addition, temporary start-up costs for the IC substrate production in Chongqing were incurred in the first quarter. On the market side, a change in product mix in the Mobile Devices segment had a negative effect on profitability in the first quarter of the financial year.
AT&S continues its efforts to make the company future-proof by intensifying investments in further structural development as well as in research and development. Investments of € 31.3 million were made during the reporting period (previous year: € 22.4 million) to prepare for future technologies and pursue the modularisation strategy, among other things. Adjusted for the start-up effects of the Chongqing project, EBITDA amounted to € 50.8 million.
The EBITDA margin amounted to 14.6% (adjusted EBITDA margin: 16.0%), falling short of the prior-year level of 15.9% (adjusted EBITDA margin: 16.5%). EBIT declined from € 0.2 million to € -0.4 million. The EBIT margin amounted to -0.1% (previous year: 0.1%).
Finance cost – net improved from € -5.9 million to € -3.1 million which is primarily attributable to the positive change in exchange rate differences (change: + € 2.5 million).
Loss for the period improved by € 2.6 million from € -7.9 million to € -5.3 million, primarily due to the improvement in Finance costs – net.
The AT&S Group breaks its operating activities down into three segments: Mobile Devices & Substrates, Automotive, Industrial, Medical, and Others. For further information on the segments and segment reporting please refer to the Annual Report 2020/21.
The segment's revenue increased by 23.7% from € 204.5 million to € 252.9 million. The successful start-up of the increased production capacity in Chongqing, which serves the growing demand for ABF substrates, made a significant contribution to revenue growth. The broader application portfolio in the Mobile Devices segment and the demand for module PCBs also had a positive effect.
EBITDA improved from € 37.0 million to € 41.8 million, most notably as a result of higher sales volume. Overall this resulted in an EBITDA margin of which fell short of the prior-year figure of 18.1%. EBIT amounted to € 2.6 million, down € 2.2 million on the prior-year value of € 4.8 million. The EBIT margin was 1.0% (previous year: 2.3%). An increase in start-up costs by € 5.3 million and a negative currency effect arising from the measurement of receivables and liabilities, which was € 2.6 million higher, reduced the otherwise positive earnings development.
After very weak business in the first quarter in the previous year due to the pandemic, the segment's revenue, at € 109.1 million, exceeded the prior-year figure of € 71.4 million by 52.8%. Revenue growth was recorded in all three areas in the first three months, with the Automotive segment reporting the biggest increase. While sales volume and, consequently, revenue were significantly higher than in the previous year in the Industrial segment, revenue in the Medical & Healthcare segment exceeded the prior-year level primarily due to a more favourable product mix.
The segment's EBITDA, at € 8.7 million, exceeded the prior-year level of € 3.1 million by € 5.6 million. Due to these effects, the EBITDA margin rose by 3.6 percentage points from 4.3% to 7.9%. EBIT improved from € -3.2 million to € 2.1 million.
The financial position as of 30 June 2021 is characterised by an increase in non-current assets. Total assets rose by 5.3% in the first three months from € 2,390.0 million to € 2,515.7 million. Additions to assets and technology upgrades amounting to € 141.0 million were offset by depreciation totalling € 46.7 million. Additions to assets led to cash CAPEX of € 153.4 million. Moreover, exchange rate effects reduced fixed assets by € 3.7 million. Cash and cash equivalents totalled € 560.7 million (31 March 2021: € 552.9 million). In addition to cash and cash equivalents, AT&S had financial assets of € 16.2 million and unused credit lines of € 328.5 million to secure the financing of the future investment programme and short-term repayments.
Equity decreased by -0.4% from € 802.0 million to € 798.6 million. The loss for the period of € -5.3 million was largely offset by positive currency effects of € 3.8 million (from the translation of net asset positions of subsidiaries) and negative measurement effects of hedge instruments of € -1.9 million. The equity ratio declined by 1.8 percentage points to 31.7% and temporarily fell below the medium-term target of 40.0% due to the substantial investment programme. This is attributable in particular to the increase in total assets as a result of investments and securing the financing of the future investment programme. Net debt rose by € 129.8 million or 25.5% from € 508.5 million to € 638.3 million.
Cash flow from operating activities amounted to € 30.5 million in the first three months of the current financial year (previous year: € 28.1 million). These cash inflows were offset by cash outflows for net investments of € 153.4 million (previous year: € 81.9 million), resulting in Operating free cash flow of € -122.9 million (previous year: € -53.8 million).
AT&S will concentrate on the start-up of the new production capacities at plant III in Chongqing, continue to push ahead the investment project in Kulim, Malaysia, and implement technology upgrades at other locations in the current year.
The expectations for AT&S's segments are currently as follows: the persisting strong demand for IC substrates also offers significant growth opportunities in the medium term. The 5G mobile communication standard will continue to drive growth in the area of Mobile Devices. An upturn is expected in the Automotive segment despite the semiconductor shortage. Driven by the roll-out of the 5G infrastructure, the Industrial segment will continue to see a positive development in the coming year. In the Medical segment, AT&S expects a positive development for the current financial year.
AT&S will continue to pursue its investment programme for new capacity and technologies in the current financial year and now plans investments totalling up to € 700 million (previously € 630 million) for the financial year 2021/22. This increase is primarily attributable to activities related to the construction of the new production site for high-end substrates in Kulim, Malaysia. Up to € 100 million is budgeted for basic investments (maintenance and technology upgrades) depending on market development, plus another € 80 million due to shifts in periods between the financial years. As part of the strategic projects, the management is planning investments totalling up to € 450 million for the financial year 2021/22 depending on the progress of the projects. These are predominantly related to investments in IC substrates in Chongqing and, among other things, expansion measures for production capacity of IC cores at the site in Leoben, which are used for manufacturing IC substrates.
Due to the good development in the first three months of the financial year and the continued strong momentum of the IC substrate market, AT&S is slightly raising its for forecast for the development of revenue and now expects revenue growth of 17 to 19% (previously: 13 to 15%), assuming a euro/US dollar exchange rate of 1.21. The adjusted EBITDA margin is expected to range between 21 and 23%, not including approximately € 50 million for the start-up of the new production capacity in Chongqing and in Kulim.
Leoben-Hinterberg, 3 August 2021
The Management Board
Andreas Gerstenmayer m.p. Simone Faath m.p. Peter Schneider m.p. Ingolf Schröder m.p.
| € in thousands | 1 Apr - 30 Jun 2021 | 1 Apr - 30 Jun 2020 |
|---|---|---|
| Revenue | 317,683 | 247,862 |
| Cost of sales | (284,691) | (227,470) |
| Gross profit | 32,992 | 20,392 |
| Distribution costs | (10,194) | (8,201) |
| General and administrative costs | (15,741) | (10,827) |
| Other operating income | 1,873 | 1,646 |
| Other operating costs | (9,315) | (2,767) |
| Other operating result | (7,442) | (1,121) |
| Operating result | (385) | 243 |
| Finance income | 1,661 | 962 |
| Finance costs | (4,809) | (6,825) |
| Finance costs – net1) | (3,148) | (5,863) |
| Loss before tax1) | (3,533) | (5,620) |
| Income taxes1) | (1,749) | (2,306) |
| Loss for the period1) | (5,282) | (7,926) |
| Attributable to owners of hybrid capital | 2,072 | 2,072 |
| Attributable to owners of the parent company1) | (7,354) | (9,998) |
| Earnings per share attributable to equity holders of the parent company (in € per share):1) |
||
| – basic | (0.19) | (0.26) |
| – diluted | (0.19) | (0.26) |
| Weighted average number of shares outstanding – basic (in thousands) |
38,850 | 38,850 |
| Weighted average number of shares outstanding – diluted (in thousands) |
38,850 | 38,850 |
1) Previous year: Adjustment Hedge Accounting
| € in thousands | 1 Apr - 30 Jun 2021 | 1 Apr - 30 Jun 2020 |
|---|---|---|
| Loss for the period1) | (5,282) | (7,926) |
| Items to be reclassified: | ||
| Currency translation differences, net of tax | 3,756 | (25,918) |
| (Losses) from the fair value measurement of hedging instruments for cash flow hedges1) |
(1,865) | – |
| Other comprehensive income for the period1) | 1,891 | (25,918) |
| Total comprehensive income for the period1) | (3,391) | (33,844) |
| Attributable to owners of hybrid capital | 2,072 | 2,072 |
| Attributable to owners of the parent company1) | (5,463) | (35,916) |
1) Previous year: Adjustment Hedge Accounting
| € in thousands | 30 Jun 2021 | 31 Mar 2021 |
|---|---|---|
| ASSETS Property, plant and equipment |
1,399,755 | 1,301,400 |
| Intangible assets | 41,688 | 42,813 |
| Financial assets | 117 | 117 |
| Deferred tax assets | 26,586 | 25,113 |
| Other non-current assets | 7,796 | 7,948 |
| Non-current assets | 1,475,942 | 1,377,391 |
| Inventories | 179,807 | 152,528 |
| Trade and other receivables and contract assets | 281,927 | 265,293 |
| Financial assets | 16,052 | 39,746 |
| Current income tax receivables | 1,309 | 2,154 |
| Cash and cash equivalents | 560,693 | 552,850 |
| Current assets | 1,039,788 | 1,012,571 |
| Total assets | 2,515,730 | 2,389,962 |
| EQUITY | ||
| Share capital | 141,846 | 141,846 |
| Other reserves | 28,971 | 27,079 |
| Hybrid capital | 172,887 | 172,887 |
| Retained earnings | 454,918 | 460,201 |
| Equity attributable to owners of the parent company | 798,622 | 802,013 |
| Total equity | 798,622 | 802,013 |
| LIABILITIES | ||
| Financial liabilities | 1,180,707 | 1,017,143 |
| Provisions for employee benefits | 53,186 | 53,331 |
| Deferred tax liabilities | 1,932 | 1,935 |
| Other liabilities | 42,142 | 41,039 |
| Non-current liabilities | 1,277,967 | 1,113,448 |
| Trade and other payables | 394,232 | 382,584 |
| Financial liabilities | 34,462 | 84,101 |
| Current income tax payables | 5,706 | 3,411 |
| Other provisions | 4,741 | 4,405 |
| Current liabilities | 439,141 | 474,501 |
| Total liabilities | 1,717,108 | 1,587,949 |
| Total equity and liabilities | 2,515,730 | 2,389,962 |
| € in thousands | 1 Apr - 30 Jun 2021 | 1 Apr - 30 Jun 2020 |
|---|---|---|
| Operating result | (385) | 243 |
| Depreciation, amortisation and impairment of property, plant and equipment and intangible assets | 46,721 | 39,250 |
| Gains/losses from the sale of fixed assets | 157 | (46) |
| Changes in non-current provisions | (88) | 462 |
| Non-cash expense/(income), net | 5,593 | (424) |
| Interest paid | (4,000) | (2,534) |
| Interest received | 566 | 962 |
| Income taxes paid | (179) | (1,132) |
| Cash flow from operating activities before changes in working capital | 48,385 | 36,781 |
| Inventories | (27,173) | (12,274) |
| Trade and other receivables and contract assets | (16,741) | (20,956) |
| Trade and other payables | 25,671 | 25,043 |
| Other provisions | 361 | (470) |
| Cash flow from operating activities | 30,503 | 28,124 |
| Capital expenditure for property, plant and equipment and intangible assets | (153,429) | (82,021) |
| Proceeds from the sale of property, plant and equipment and intangible assets | 8 | 141 |
| Capital expenditure for financial assets | (15,042) | (98,619) |
| Proceeds from the sale of financial assets | 38,193 | 9,285 |
| Cash flow from investing activities | (130,270) | (171,214) |
| Proceeds from borrowings | 163,564 | 110,613 |
| Repayments of borrowings | (53,490) | (4,246) |
| Proceeds from government grants | 335 | 13,039 |
| Cash flow from financing activities | 110,409 | 119,406 |
| Change in cash and cash equivalents | 10,642 | (23,684) |
| Cash and cash equivalents at beginning of the year | 552,850 | 417,950 |
| Exchange losses on cash and cash equivalents | (2,799) | (6,701) |
| Cash and cash equivalents at end of the period | 560,693 | 387,565 |
| Equity | |||||||
|---|---|---|---|---|---|---|---|
| attributable | |||||||
| to owners | Non | ||||||
| € in thousands | Share capital |
Other reserves |
Hybrid capital | Retained earnings |
of the parent company |
controlling interests |
Total equity |
| 31 Mar 20201) | 141,846 | 14,723 | 172,887 | 430,803 | 760,259 | – | 760,259 |
| Loss for the period | – | – | – | (7,926) | (7,926) | – | (7,926) |
| Other comprehensive income for the period | – | (25,918) | – | – | (25,918) | – | (25,918) |
| thereof currency translation differences, net of tax | – | (25,918) | – | – | (25,918) | – | (25,918) |
| Total comprehensive income for the period | – | (25,918) | – | (7,926) | (33,844) | – | (33,844) |
| 30 Jun 20201) | 141,846 | (11,195) | 172,887 | 422,877 | 726,415 | – | 726,415 |
| 31 Mar 2021 | 141,846 | 27,079 | 172,887 | 460,201 | 802,013 | – | 802,013 |
| Profit for the period | – | – | – | (5,282) | (5,282) | – | (5,282) |
| Other comprehensive income for the period | – | 1,891 | – | – | 1,891 | – | 1,891 |
| thereof currency translation differences, net of tax | – | 3,756 | – | – | 3,756 | – | 3,756 |
| thereof change in hedging instruments for cash flow hedges |
– | (1,865) | – | – | (1,865) | – | (1,865) |
| Total comprehensive income for the period | – | 1,891 | – | (5,282) | (3,391) | – | (3,391) |
| 30 Jun 2021 | 141,846 | 28,971 | 172,887 | 454,918 | 798,622 | – | 798,622 |
1) Previous year: Adjustment hedge accounting
| Mobile Devices & | Automotive, | Elimination/ | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Substrates | Industrial, Medical | Others | Consolidation | Group | ||||||
| 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | 1 Apr - 30 Jun | |
| € in thousands | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 |
| Segment revenue | 252,882 | 204,468 | 109,107 | 71,411 | – | – | (44,306) | (28,017) | 317,683 | 247,862 |
| Internal revenue | (32,483) | (17,314) | (11,823) | (10,703) | – | – | 44,306 | 28,017 | – | – |
| External revenue | 220,399 | 187,154 | 97,284 | 60,708 | – | – | – | – | 317,683 | 247,862 |
| Operating result before depreciation/amortisation |
41,788 | 36,972 | 8,661 | 3,103 | (4,113) | (582) | – | – | 46,336 | 39,493 |
| Depreciation/amortisation incl. appreciation |
(39,141) | (32,133) | (6,530) | (6,264) | (1,050) | (853) | – | – | (46,721) | (39,250) |
| Operating result | 2,647 | 4,839 | 2,131 | (3,161) | (5,163) | (1,435) | – | – | (385) | 243 |
| Finance costs - net1) | (3,148) | (5,863) | ||||||||
| Loss before tax1) | (3,533) | (5,620) | ||||||||
| Income taxes1) | (1,749) | (2,306) | ||||||||
| Loss for the period1) | (5,282) | (7,926) | ||||||||
| Property, plant and equipment and intangible assets2) |
1,254,561 | 1,161,891 | 174,975 | 170,629 | 11,907 | 11,693 | – | – | 1,441,443 | 1,344,213 |
| Additions to property, plant and equipment and intangible assets |
127,328 | 92,328 | 12,565 | 8,188 | 1,139 | 1,413 | – | – | 141,032 | 101,929 |
1) Previous year: Adjustment hedge accounting
2) Previous year values as of 31 March 2021
| € in thousands | 1 Apr - 30 Jun 2021 | 1 Apr - 30 Jun 2020 |
|---|---|---|
| Austria | 5,493 | 3,525 |
| Germany | 42,672 | 28,818 |
| Other European countries | 21,106 | 13,601 |
| China | 2,103 | 16,767 |
| Other Asian countries | 20,452 | 11,879 |
| Americas | 225,857 | 173,272 |
| Revenue | 317,683 | 247,862 |
| € in thousands | 30 Jun 2021 | 31 Mar 2120 |
|---|---|---|
| Austria | 119,023 | 116,733 |
| China | 1,253,715 | 1,160,930 |
| Others | 68,705 | 66,550 |
| Property, plant and equipment and intangible assets | 1,441,443 | 1,344,213 |
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft Fabriksgasse 13 - 8700 Leoben Austria www.ats.net
Gerda Königstorfer Phone: +43 (0)3842 200-5925 [email protected]
This report contains forward-looking statements which were made on the basis of the information available at the time of publication. These can be identified by the use of such expressions as "expects", "plans", "anticipates", "intends", "could", "will", "aim" and "estimation" or other similar words. These statements are based on current expectations and assumptions. Such statements are by their very nature subject to known and unknown risks and uncertainties. As a result, actual developments may vary significantly from the forwardlooking statements made in this report. Recipients of this report are expressly cautioned not to place undue reliance on such statements. Neither AT&S nor any other entity accept any responsibility for the correctness and completeness of the forward-looking statements contained in this report. AT&S undertakes no obligation to update or revise any forwardlooking statements, whether as a result of changed assumptions or expectations, new information or future events.
Percentages and individual items presented in this report are rounded, which may result in rounding differences.
Formulations attributable to people are to be understood as gender-neutral.
This report in no way represents an invitation or recommenddation to buy or sell shares in AT&S.
The report is published in German and English. In case of doubt, the German version is binding.
No responsibility accepted for errors or omissions.
Published on 3 August 2021
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