AT & S Austria Technologie und Systemtechnik Aktiengesellschaft

EANS-News: AT & S Austria Technologie und Systemtechnik Aktiengesellschaft / Financial year 2016/17: AT&S with increased revenue in the first nine months and operational improvements at the new plant in China (with document)

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9-month report

* Continued good demand in all key customer segments
* In the core business, AT&S increased relative profitability
* Revenue 5.3% above the strong prior-year level; third quarter was on record
level 
* EBITDA adjusted for the start-up effects from Chongqing rose by 8.5% compared
with
  the previous year,
  the adjusted EBITDA margin was at 26.0%; the non-adjusted figures were still
  influenced by the start-up effects from Chongqing
* Further operational improvements in the ramp-up of the new IC substrate plant
  in China

 
AT&S, one of the global technology leaders for high-end printed circuit boards,
records an increase in revenue and a clear plus in earnings in the first nine
months compared with the very high level of the previous year and adjusted for
the start-up effects in China.
 
Andreas Gerstenmayer, CEO of AT&S, commented: "The repositioning of AT&S from a
pure printed circuit board manufacturer to a much broader-based provider of
high-end connectivity solutions is continuing. We achieved significant
improvements in the operational performance in the new IC substrate plant in
China. Both production volume and yield have increased considerably. We are
still faced with challenges because the transformation in the semiconductor
industry, the customer segment for IC substrates, with the related changes in
the product and technology cycles, also has an impact on AT&S. This influences
the product mix and the achievable price levels significantly. The upgrade of
parts of the Shanghai plant to the next generation of technology for high-end
printed circuit boards has considerably progressed, and serial production is
scheduled to start in the second half of calendar year 2017. Both technology
topics are essential for the future positioning and the success of AT&S. In
contrast, the development in the core business is very satisfactory, with very
good demand and the usual seasonality."
 
Asset, financial and earnings position
AT&S exceeded the very good revenue figures of the previous year in the first
nine months. At EUR 615.1 million, revenue was 5.3% higher than in the prior-
year period.
 
Based on the start-up effects of the Chongqing project (EUR 51.6 million),
EBITDA decreased by EUR 38.1 million or     -27.2% from EUR 140.2 million to EUR
102.1 million in the first nine months. Adjusted for these start-up effects,
EBITDA amounted to EUR 153.7 million, up 8.5% on the high prior-year value,
based on running cost savings and positive currency effects. The EBITDA margin
was at 16.6%, down -7.4 percentage points on the very high prior-year level of
24.0%. Adjusted for the Chongqing project, the margin, at 26.0%, significantly
exceeds the high adjusted level of 24.4% in the previous year.
 
Depreciation of property, plant and equipment and amortisation of intangible
assets increased to EUR 90.3 million (prior-year period: EUR 64.2 million) based
on the Chongqing project. Consequently, EBIT decreased by EUR 64.3 million from
EUR 76.1 million to EUR 11.8 million. Adjusted for the Chongqing project, EBIT
amounted to EUR 97.2 million, thus exceeding the adjusted prior-year value by
EUR 13.4 million. The EBIT margin was 1.9% (prior-year period: 13.0%). The
adjusted margin amounted to 16.4%, and was 1.9 percentage points higher than the
adjusted prior-year level of 14.5%.
 
Finance costs dropped from EUR -2.7 million to EUR -18.6 million, which was
among other things due to higher gross interest expenses and negative currency
effects. The estimates for feasibility of deferred taxes were adjusted and led
to increased tax expenses of total EUR 13.0 million in the first nine months of
2016/17.
 
The profit for the period decreased by EUR 79.9 million from EUR 60.2 million in
the prior-year period to a loss for the period of EUR -19.7 million due to the
start-up effects of the Chongqing project and the significantly higher negative
financial result. This resulted in a decline in earnings per share from EUR 1.55
in the prior-year period to EUR -0.51.
 
Cash flow and statement of financial position
Cash flow from operating activities before changes in working capital amounted
to EUR 74.5 million vs EUR 123.4 million in the previous year. Cash flow from
investing activities - investments in the plants under construction in
Chongqing, technology investments in other locations and investments in
financial assets - amounted to EUR -108.7 million (prior-year period: EUR -
175.7 million).

Equity decreased by 3.9% from EUR 568.9 million to EUR 546.8 million due to the
loss for the period and the dividend paid of EUR 14.0 million. The resulting
equity ratio, at 38.1%, was -4.2 percentage points lower than the value at
31 March 2016 as expected.

Net debt rose by EUR 188.6 million from EUR 263.2 million at 31 March 2016 to
EUR 451.8 million. This expected increase resulted from the high investment
activities and the increase in working capital, which cannot be financed from
the cash flow from operating result. Consequently, the net gearing ratio, at
82.6% at 31 December 2016, was clearly higher than at 31 March 2016 (46.3%). In
total, AT&S has cash and cash equivalents of EUR 166.0 million available or
available in the short term to continue financing the start-up phase of the
Chongqing projects as well as other necessary investments in the current
financial year. In addition, AT&S has EUR 223.8 million of unused credit lines
as a financing reserve.
 
Key financials:


According to IFRS;     Q1-3 2015/16        Q1-3 2016/17            Change
in EUR million       01.04.-31.12.2015   01.04.-31.12.2016
Revenue                           584.3               615.1                 5.3%
EBITDA                            140.2               102.1               -27.2%
EBITDA margin (in                  24.0                16.6                    -
%)
EBITDA adjusted*)                 141.6               153.7                 8.5%
EBITDA margin                      24.4                26.0                    -
adjusted (in %)*)
EBIT                               76.1                11.8               -84.4%
EBIT margin (in %)                 13.0                 1.9                    -
EBIT adjusted*)                    83.8                97.2                16.0%
EBIT marginadjusted                14.5                16.4                    -
(in %)*)
Profit/loss for the                60.2               -19.7              > -100%
year
Cash flows from                   123.4                74.5               -39.6%
operating
activities before
changes in working
capital
Net CAPEX                         176.9               192.3                 8.7%
Equity ratio                     42.3**)               38.1                    -
Net debt                        263.2**)              451.8                71.7%
Earnings per                       1.55               -0.51              > -100%
average number of
shares outstanding
(in EUR)

*) Adjusted for the Chongqing project.
**) At 31.03.2016.
 
 

Mobile Devices & Substrates segment with revenue growth; earnings still
influenced by Chongqing start-up effects
Demand for high-end printed circuit boards for mobile devices was very good in
the first nine months, but characterised by significantly stronger seasonality
in the first quarter compared with the same period of the previous year. Revenue
from IC substrates overcompensated this development. Consequently, revenue
amounted to EUR 438.6 million in the first nine months of 2016/17, up 4.5% on
the figure of the previous year, slightly influenced by negative currency
translation effects. Due to the start-up effects of the Chongqing project and
the significantly increased price pressure for IC substrates, due to major
technology and product mix changes, EBITDA declined by EUR 53.0 million or -
48.6% compared with the prior-year period and amounted to EUR 56.1 million.
Adjusted for the Chongqing effect, EBITDA amounted to EUR 103.7 million (prior-
year period: EUR 111.5 million). This results in an adjusted EBITDA margin of
25.0%, which is lower than the 26.7% in the previous year.

Automotive, Industrial, Medical segment with increases in revenue and earnings
Revenue in this segment rose by 6.2% from EUR 246.7 million to
EUR 262.0 million. The main drivers were still revenues from high-end printed
circuit boards in the Automotive sector, which reflects the trend towards more
electronic components in vehicles, and massively growing revenue in the Medical
sector. Revenue in the Industrial sector slightly exceeded the high level of the
previous year. EBITDA rose by 48.3% from EUR 24.9 million to EUR 37.0 million.
The EBITDA margin increased by 4.0 percentage points to 14.1%, thus clearly
exceeding the prior-year level. The segment's result also benefited from the
reversal of a provision for unused building space, as this space is now used
again. Adjusted for the share in the start-up effects of the Chongqing project,
EBITDA amounts to EUR 41.0 million and the adjusted EBITDA margin to 16.0%
(prior-year period, adjusted: 9.8%).

Status Chongqing: Operational improvements at the plant for IC substrates; good
progress at plant 2 for substrate-like printed circuit boards
As at 31 December 2016, AT&S invested EUR 428.0 million in the Chongqing
project. The optimisation of the highly complex production facilities for IC
substrates still causes a flatter ramp-up although there have been significant
operational improvements, which have led to a higher volume output and yield.
The ramp of the second production line started in December 2016. The first
production line for substrate-like printed circuit boards is running at high
capacity and good performance, the second production line is in installation.

Outlook for the financial year 2016/17
AT&S expects the usual seasonality for the fourth quarter of 2016/17. Based on
the developments in the raw material markets (copper, laminates), cost of
material is under pressure. Due to changes in product and technology cycle in
the semiconductor industry, price pressure for IC substrates continues.
 
Provided that the macroeconomic environment remains stable, the USD-EUR currency
relation stays at a similar level as in the past financial year 2015/16 and
demand is stable in the core business, AT&S expects an increase in revenue of
 4-6% for the current financial year 2016/17. The EBITDA margin should range
between 15-16% primarily based on the start-up costs for the plants in
Chongqing. However, the EBITDA margin in the core business should be at a
similar level as in the financial year 2015/16. Higher depreciation and
amortisation of an additional EUR 40 million for the Chongqing project in the
financial year 2016/17 will have a significant influence on EBIT.
Attachments with Announcement:
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http://resources.euroadhoc.com/us/2bbhphur
http://resources.euroadhoc.com/us/IyCAqoJU

Further inquiry note:
Elke Koch, Director Investor Relations & Communications 
Tel: +43 3842 200-5925; Mobile: +43 676 8955 5925; e.koch@ats.net 

Marina Konrad, Head of Corporate Communications
Tel: +43 3842 200-5423; Mobile: +43 676 8955 5423; m.konrad@ats.net

end of announcement                               euro adhoc 
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Attachments with Announcement:
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http://resources.euroadhoc.com/us/2bbhphur
http://resources.euroadhoc.com/us/IyCAqoJU


company:     AT & S Austria Technologie und Systemtechnik Aktiengesellschaft
             Fabriksgasse  13
             A-8700 Leoben
phone:       03842 200-0
mail:     e.koch@ats.net
WWW:      www.ats.net
sector:      Technology
ISIN:        AT0000969985
indexes:     WBI, Prime Market, VÖNIX, ATX GP
stockmarkets: official market: Wien 
language:   English
 



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