ams AG

EANS-Adhoc: ams AG
ams reports second quarter results at high end of expectations; year-on-year revenue growth expected in third quarter; revenue target of EUR 1bn in 2019; Alexander Everke to become CEO of ams in March 2016; agreement with State ...

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Mid Year Results/6-month report/Management Board
27.07.2015


ams reports second quarter results at high end of expectations; year-on-year
revenue growth expected in third quarter; revenue target of EUR 1bn in 2019;
Alexander Everke to become CEO of ams in March 2016; agreement with State of New
York (USA) on construction of dedicated wafer fab for use by ams; acquisition of
environmental CMOS sensor business from NXP

Key financial data for the second quarter and first half 2015

Unterpremstaetten, Austria (27 July 2015) - ams (SIX: AMS), a leading worldwide
manufacturer of high performance sensor and analog solutions, reports second
quarter 2015 results at the high end of expectations with year-on-year and
quarter-on-quarter growth in revenues and earnings. For the third quarter 2015,
ams expects year-on-year revenue growth with operating profitability reflecting
revenue trends and the addition of R&D resources. ams adds a revenue goal of EUR
1 billion in 2019 and announces that Alexander Everke will become CEO of ams in
March 2016. ams has entered into an agreement with the State of New York (USA)
on construction of a dedicated analog wafer fab for use by ams and has acquired
the environmental CMOS sensor business from NXP.

Second quarter group revenues were EUR 169.5 million, the highest quarterly
revenues in ams history, up 11% sequentially compared to the first quarter and
increasing 59% from EUR 106.3 million in the same quarter 2014. Group revenues
for the first half of 2015 were EUR 322.9 million, increasing 68% from EUR 192.6
million recorded in the first half of 2014. On a constant currency basis, second
quarter revenues were 36% higher compared to the second quarter last year and
first half revenues were 44% higher compared to the first half of 2014. 

In the second quarter, gross margin remained high at 56% excluding
acquisition-related costs and 54% including acquisition-related costs, compared
to 57% and 55% respectively, in the same quarter 2014. In the first half of
2015, gross margin was unchanged at 56% excluding acquisition-related costs and
54% including acquisition-related costs, from 56% and 54% respectively, in the
first half of 2014.

The result from operations (EBIT) excluding acquisition-related costs for the
second quarter was EUR 48.5 million or 29% of revenues, increasing by 84% from
EUR 26.4 million in the same period 2014. The result from operations (EBIT)
including acquisition-related costs for the second quarter was EUR 44.6 million
or 26% of revenues, up 86% from EUR 24.0 million in the same period 2014. This
increase includes a one-time positive effect from the sale of an investment as
well as operational leverage effects. For the first half of 2015, the result
from operations (EBIT) including acquisition-related costs was EUR 82.8 million,
up 110% from EUR 39.4 million in the same period 2014.

The net result for the second quarter was EUR 41.8 million compared to EUR 22.2
million in the same period last year. Basic and diluted earnings per share were
CHF 0.63/0.61 or EUR 0.61/0.58 based on 68,948,844/71,639,611 shares
(basic/diluted; weighted average) compared to CHF 0.40/0.38 or EUR 0.33/0.31 for
the second quarter 2014 based on 67,822,300/70,833,270 shares (basic/diluted;
split-adjusted weighted average). The net profit for the first half year 2015
was EUR 84.0 million, equivalent to CHF 1.28/1.23 or EUR 1.22/1.17 per share
(basic/diluted) based on 68,792,636/71,560,877 shares (basic/diluted; weighted
average), compared to EUR 36.9 million, i.e. CHF 0.66/0.63 or EUR 0.54/0.52 per
share (basic/diluted) based on 67,788,585/ 70,855,770 shares (basic/diluted;
split-adjusted weighted average), for the same period last year.

Operating cash flow for the second quarter was EUR 30.1 million compared to EUR
33.9 million in the second quarter last year, while operating cash flow for the
first half was EUR 74.4 million compared to EUR 48.2 million in the first half
year 2014. Total backlog as of today (excluding consignment stock agreements) is
above EUR 138 million while total backlog on June 30, 2015 (excluding
consignment stock agreements) was EUR 133.3 million compared to EUR 150.7
million at the end of the first quarter and EUR 107.1 million on June 30, 2014.

ams' business performed strongly in the second quarter and first half of 2015
given robust worldwide demand for ams' high performance sensor and analog
solutions.

ams' consumer and communications business showed a very positive performance in
the second quarter and first half, particularly driven by its light sensor,
gesture sensor, and NFC product areas. Run rates for the ams portfolio of
intelligent light sensors for leading consumer and smartphone OEMs continued at
high levels in the second quarter including support for new devices. The
company's gesture sensor solution combining advanced gesture recognition with
RGB color, proximity sensing and other functions in a minimized footprint is
shipping into multiple device platforms in high volume. Other product lines also
performed well supporting major device vendors' products while in audio
solutions ams expects further adoption of its low-power ANC noise cancellation
technology in bundled in-box accessories. 

ams continued high volume shipments of its patented boosted NFC solution in the
second quarter driven by the demand for smartphones and small mobile devices.
The company's technology ensures reliable transactions in space-constrained
devices such as smartphones and wearables. ams is strongly positioned in
differentiated boosted NFC technology with a multi-year roadmap to exploit the
company's technical advantages. ams is pursuing multiple paths including
strategic licensing to maximize the market and financial value of its
proprietary NFC technology and has recently concluded a licensing agreement for
mobile device boosted NFC technology with a strategic partner. ams is seeing
strong market traction for its NFC offering and expect NFC solutions to
contribute meaningfully to its anticipated revenue and earnings growth over the
coming years.

The company's industrial, medical and automotive businesses posted attractive
results in the second quarter and first half. The demand environment in ams'
industrial end markets is benefitting its differentiated sensor and sensor
interface solutions as leading industrial OEMs rely on ams to power high value
industrial sensor applications. ams is sampling first announced products in the
emerging area of sensor-based LED lighting control for industrial applications.
ams' medical business performed well in the second quarter and first half
focusing on digital imaging sensor solutions for advanced computed tomography
(CT), digital X-ray and mammography. Here, ams enables high quality diagnostics
for high performance imaging systems. In the company's automotive business, good
demand for its sensor and sensor interface solutions continued in the second
quarter. ams is well positioned in advanced driver assistance applications such
as collision avoidance, magnetic and inductive position sensing, and battery
management which align with major automotive trends. ams' sensor and analog
expertise helps improve vehicle safety and comfort as sensor content in vehicles
continues to expand. The specialty foundry business also contributed positively
to the company's results in the first half.

ams' strong pipeline of design and development projects points towards
attractive growth potential in the coming years. ams has therefore decided to
introduce the strategic goal of EUR 1bn in revenues in 2019 built on organic
expansion of its business. To leverage ams' capabilities long-term and beyond
this goal, the Supervisory Board is pleased to announce that Alexander Everke
will join ams' Management Board on October 1, 2015 as CEO designate with
responsibility for corporate strategy, sales and marketing. On March 1, 2016,
Alexander Everke will become CEO of ams. At this time, Kirk Laney will take on
the new position of Chief Strategist Sensor Solutions for a minimum of 18
months, responsible for defining sensor solution roadmaps. He will work closely
with the other Management Board members, particularly on M&A and strategic
relationships.

Alexander Everke built extensive experience in all aspects of the semiconductor
business including mixed signal and analog during his 24-year career in the
semiconductor sector. Following a master diploma in Electrical Engineering and a
degree in International Business, he spent 14 years at Siemens AG and Infineon
Technologies AG in sales, marketing and senior management roles including VP
Sales & Marketing for the Memory Products Division, SVP Global Sales, and
General Manager Chip Card and Security ICs Business Unit. From 2006-2014,
Alexander Everke held senior management positions at NXP Semiconductors
including SVP & General Manager Business Line Power Management, EVP & General
Manager Business Unit Multi Market Semiconductors, EVP & General Manager
Business Unit High Performance Mixed Signal, and EVP & General Manager Business
Unit Infrastructure and Industrial and was member of the NXP management team.

In this context, the Supervisory Board would like to emphasize Kirk Laney's
outstanding contribution to the success of ams and continued strong leadership
as ams is becoming a leading provider of sensor solutions. Kirk Laney has been
instrumental in creating leading technology and significant growth opportunities
for ams which will continue to shape the future of the company. The Supervisory
Board has also extended the Management Board contract of Michael
Wachsler-Markowitsch as CFO of ams until 2019.

Fast-forwarding its manufacturing strategy, ams has entered into an agreement
with the State of New York (USA) under which they will construct a new analog
wafer fab to ams' specifications. In its first buildout stage, the wafer fab
will offer capacity of at least 150k 200mm-wafer equivalents per year with a
view to further expansion up to a total buildout potential of over 450k
200mm-wafer equivalents per year. Capable of 130nm and more advanced future
manufacturing nodes, the new wafer fab will be located in Tech Valley, the
largest technology region in the U.S. and home to other nanotechnology and
semiconductor companies.

Under the agreement, ams will rent the fully operational wafer fab for a period
of 20 years for a nominal yearly amount and will only incur operating expenses
on the wafers produced. This structure offers significant cost benefits as ams
will not be burdened with depreciation expenses for facility and equipment and
therefore expects cost per wafer to be highly competitive. ams expects the new
wafer fab to become operational by the end of 2017 with volume production ramp
immediately thereafter. As part of the project, ams also plans to establish a
design center at the Tech Valley location with a focus on advanced wafer scale
packaging. Together with ams' highly efficient 200mm wafer fab in Austria whose
recent expansion shows ams' clear long-term commitment to this manufacturing
location, the new wafer fab advances and strengthens ams' robust production
model which includes outsourcing partnerships with major merchant providers. 

ams also completed a strategic transaction in the quarter acquiring the CMOS
sensor business from NXP Semiconductors for an undisclosed amount. The
acquisition of the CMOS sensor business based in Eindhoven (Netherlands) expands
ams' environmental sensor portfolio with advanced monolithically integrated
relative humidity, temperature, and pressure sensors and adds a fully developed
product line with first shipments expected in the beginning of 2016. ams sees
this as a disruptive technology given ultra-small form factors deploying
chip-scale packaging (CSP), very low power consumption, outstanding analog
accuracy and performance, and high cost-effectiveness. This attractive product
line opens a large array of applications across mobile device/wearable,
consumer, industrial, medical and automotive markets with significant revenue
opportunities in the coming years. As part of the transaction, over 100 relevant
patents were transferred or licensed to ams creating a substantial product and
IP position in the growth market for CMOS-based environmental sensors. To
integrate the CMOS sensor team of around 40 employees, ams recently opened a
design center in the Netherlands.

In operations, the second capacity expansion step in ams' wafer fab in Austria
was completed as planned. To support two significant new programs for mobile
device/smartphone applications which ams expects to ramp in 2016, ams has
decided to accelerate investments into additional fab equip¬ment. ams will also
implement a further expansion of its test capacity for upcoming high volume
requirements. Total capital expenditures for 2015 are therefore expected to
reach EUR 75-80 million as ams prepares to realize its growth plans in the
coming years.

For the third quarter 2015, ams expect revenues of EUR 150-155 million driven by
ongoing business momentum in its consumer and non-consumer markets based on
available information and current exchange rates. ams anticipates continued high
gross margin profitability in the third quarter with gross margins remaining on
a comparable level quarter-on-quarter while operating profitability is expected
to reflect revenue development and the addition of further R&D resources
including the new CMOS sensor business.

ams is confident about the strong revenue and earnings potential of its
business, particularly when looking towards 2016 and beyond, based on available
information. ams' focus on high performance sensor solutions including new
opportunities such as IP licensing drives a full design and development pipeline
across the markets for smartphones, mobile devices, industrial, medical, and
automotive systems. This pipeline offers significant opportunities for revenue
and earnings growth on the way to ams' EUR 1bn revenue goal in 2019.

The company's first half report 2015 including additional financial information
is available on the company website at
http://www.ams.com/eng/Investor/Financial-Reports .


###



About ams

ams is a global leader in the design and manufacture of advanced sensor
solutions and analog ICs. Our mission is to shape the world with sensor
solutions by providing a seamless interface between humans and technology. 

ams' high-performance analog products drive applications requiring extreme
precision, dynamic range, sensitivity, and ultra-low power consumption. Products
include sensors, sensor interfaces, power management and wireless ICs for
consumer, communications, industrial, medical, and automotive markets.

With headquarters in Austria, ams employs over 1,800 people globally and serves
more than 8,000 customers worldwide. ams is listed on the SIX Swiss stock
exchange (ticker symbol: AMS). More information about ams can be found at
www.ams.com.


Further inquiry note:
Moritz M. Gmeiner
Director Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement                               euro adhoc 
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issuer:      ams AG
             Tobelbader Strasse   30
             A-8141 Unterpremstaetten
phone:       +43 3136 500-0
FAX:         +43 3136 500-931211
mail:     investor@ams.com
WWW:      www.ams.com
sector:      Technology
ISIN:        AT0000A18XM4
indexes:     
stockmarkets: 
language:   English
 



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