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AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben Tel +43 (0) 3842 200-0
www.ats.net
AT&SFirst choice for advanced applications
Conference Call Preliminary Figures FY 2017/18May 08, 2018
08.30 am CEST
Conference Call presentation: FY 2017/18 1
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Conference Call presentation: FY 2017/18 2
Market development
Communication
Decline in smartphone sales volume by 2.3% for the first time in 2017
2018 – 2020 5G-capable smartphones provide for above-average growth of 2.8% p.a.
Computer
Slight decline of overall market by approx. 2.5% in 2017
Slight increase forecast for servers in 2018, while tablet sales stagnate
2018 – 2020 average growth of roughly 1.8% p.a.
Consumer
Market trend is the interconnection of devices (“Connected Devices”, “Internet of Things” – “IoT”)
2018 – 2020 average annual growth of roughly 4.3% p.a.
IC substrates
2017 slight growth with a total market volume of $ 5.4 billion
“System-in-package” or “all-in-one” modules for the integration of functions are the growth drivers for the future
2018 – 2020 growth rate of 2.8% p.a.
Development in the customer segments in the calendar year 2017
Conference Call presentation: FY 2017/18 3
Market development
Automotive electronics
Strong growth due to continuous increase in the proportion of electronics in vehicles
Electrification, interconnection and autonomous driving are the growth drivers
2018 – 2020 growth of 3.9% p.a.
Industrial electronics
Stable growth in 2017 at 2.9% due to automation and energy efficiency
Driven by robotics, automation and Industry 4.0 activities
2018 – 2020 growth by up to 3.4% p.a.
Medical electronics
Growth in 2017 by roughly 4.8% in mobile diagnostic equipment and therapy devices
High complexity in applications such as diagnostic and imaging devices, mobile devices on and in the body
2018 – 2020 growth rates of 2.1% p.a.
Development in the customer segments in the calendar year 2017
3
Conference Call presentation: FY 2017/18 4
Highlights in the financial year 2017/18
Very successful year 2017/18
Growth in all business segments above market average
High operating performance (utilization, yield, efficiency)
Position as technology leader in a challenging industry strengthened
Ramp-up of the new mSAP lines in record time
Operational improvement in the area of IC substrates
Successful positioning in the high-frequency segment
Balance sheet structure significantly strengthened through hybrid bond (€ 173.0 million)
AT&S again listed on the Austrian lead index ATX
Among the top performers of the Vienna Stock Exchange with share price gaining 113.8 % in FY 2017/18
Record levels for revenue, EBITDA and EBIT
4
Conference Call presentation: FY 2017/18 5
Preliminary results for the financial year 2017/18
Revenue up 21.7% to € 991.8 million
High-end printed circuit boards for mobile devices, especially mSAP and IC substrates, contributed to revenue growth
Strong demand in the automotive, industrial, medical segments
Negative exchange rate effects amounting to €-46.8 million had an impact on revenue
Generally high operating performance and product mix improve earnings
EBITDA margin: 22.8% (PY: 16.1%)
EBIT margin: 9.1% (PY: 0.8%)
EPS improved from €-0.59 to €1.38
Capex of € 141.7 million financed from cash flow from operating activities
Equity ratio increased to 46.5% due to issue of hybrid bond
Debt repayment period (net debt/EBITDA) improved to 0.9 years
Dividend of € 0.36 (PY: € 0.1) proposed
Record levels for revenue and EBITDA
5
Conference Call presentation: FY 2017/18 6
Revenue and EBITDA development
€ in millions
6
Split revenue FY 2017/18: Business Unit
Split revenue FY 2017/18: Customer Region
6
66%
34%Mobile Devices & Substrates
Automotive, Industrial,Medical
63%21%
10%6%
Americas
Germany/Austria
Asia
Other European countries
Revenue: YoY: + 21.7%: very good product mix, high demand and additional revenue from all plantsEBITDA: YoY: + 72.6 %: expansion capex, high operational performance, successful introduction & optimization of mSAP
199.8 199.6
286.0 280.2225.9
814.9
991.8
28.8 29.774.7 85.9
35.7
130.9
226.0
Q42016/17
Q12017/18
Q22017/18
Q32017/18
Q42017/18
FY2016/17
FY2017/18
Revenue EBITDA and margin
16.1%30.7%26.1%14.9%14.4% 15.8% 22,8%
Conference Call presentation: FY 2017/18 7
Net CAPEX & Staff
Net CAPEXFY 2017/18: CAPEX at a high level due to mSAP upgrade and Chongqing phase 1
€ in millions
90.3
164.8
254.3240.7
141.7
2013/14 2014/15 2015/16 2016/17 2017/18
* incl. contractors, FTE, average for the period
Staff*Increase in number of employees by more than 2,900
7,0277,638
8,7599,526
9,981
2013/14 2014/15 2015/16 2016/17 2017/18
Conference Call presentation: FY 2017/18 8
Business Development – Mobile Devices & Substrates
113.7 113.6
197.6 199.6
137.2
486.5
648.0
12.4 20.959.4 75.0
23.768.5
179.0
Q4 2016/17 Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 FY 2016/17 FY 2017/18
Revenue EBITDA
Successful introduction of mSAP technology
Operational improvements in IC substrates
EBITDA improvements as a result of product mix
Very strong Q2 and Q3, seasonality in Q4
Price pressure on IC substrates remains
€ in millions (unless otherwise indicated)
FY 2016/17 FY 2017/18 Change in %
Revenue 573.0 738.9 29.0%
Revenue with external customers
486.5 648.0 33.2%
EBITDA 68.5 179.0 161.3%
EBITDA margin 12.0% 24.2% -
€ in millions; * Revenue with external customers
Revenue* and EBITDA
Conference Call presentation: FY 2017/18 9
84.9 85.0 87.3 79.3 87.7
324.1 339.3
14.5 9.7 13.2 9.3 14.551.5 46.8
Q4 2016/17 Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 FY 2016/17 FY 2017/18
Revenue EBITDA
Business Development – Automotive, Industrial, Medical Continued growth path in all sub-segments,
particularly in Industrial and Medical
EBITDA 2016/17: € 44.3 m (included a reversal of provision of € 7.2 m)
EBITDA margin impacted by negative FX effects, higher raw material prices
€ in millions (unless otherwise indicated)
FY 2016/17 FY 2017/18 Change in %
Revenue 351.5 364.9 3.8%
Revenue with external customers
324.1 339.3 4.7%
EBITDA 51.5 46.8 (9.1%)
EBITDA margin 14.6% 12.8% -
Revenue* and EBITDA
€ in millions; * Revenue with external customers
Conference Call presentation: FY 2017/18 10
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Conference Call presentation: FY 2017/18 11
Financials FY 2017/18
High demand, additional revenue contribution mainly from both plants in Chongqing, Negative FX impact of € 46.8 m.
Generally high operational performance, successful implementation & optimization of mSAP technology
Further reduction mainly due to positive FX impact
Significantly higher earningsCapitalization of deferred taxes in AustriaReduced tax scheme in Shanghai effected
€ in thousands (unless otherwise stated)01 Apr 2016 – 31 Mar 2017 01 Apr 2017 – 31 Mar 2018
Change
YoY
STATEMENT OF PROFIT OR LOSS
Revenue 814,906 991,843 21.7%
produced in Asia 82% 84% 2pp
produced in Europe 18% 16% (2pp)
EBITDA 130,933 225,977 72.6%
EBITDA margin 16.1% 22.8% 6.7pp
EBIT 6,649 90,286 >100%
EBIT margin 0.8% 9.1% 8.3pp
Finance costs – net (17,499) (14,775) 15.6%
Income taxes (12,047) (18,992) (57.6%)
Profit/(loss) for the year (22,897) 56,519 >100%
Cash earnings 101,764 192,211 88.9%
Earnings per share (€ 0.59) € 1.38 >100%
Conference Call presentation: FY 2017/18 12
Financials FY 2017/18
Increase as a result of hybrid bond issue and net profit
Negative FX effects (mainly RMB-EUR and USD-EUR) of € 53.5 m. Positive: Hybrid bond issue (€ 173.0m)
In 2016/17 special net debt optimization program
Hybrid bond issue (€ 173.0m)
€ in thousands (unless otherwise stated)31 Mar 2017 31 Mar 2018 Change
STATEMENT OF FINANCIAL
POSITION
Non-current assets 1,029,363 944,267 (8.3%)
Current assets 407,331 586,172 43.9%
Equity 540,094 711,391 31.7%
Non-current liabilities 569,849 515,276 (9.6%)
Current liabilities 326,751 303,772 (7.0%)
Total assets 1,436,694 1,530,439 6.5%
Net debt 380,549 209,237 (45.0%)
Net debt/EBITDA 2.9x 0.9x (2.0pp)
Net gearing 70.5% 29.4% (41.1pp)
Net working capital 24,374 72,437 >100%
Net working capital per revenue 3.0% 7.3% 4.3pp
Equity ratio 37.6% 46.5% 8.9pp
Conference Call presentation: FY 2017/18 13
Financials FY 2017/18
Hybrid bond issue (€ 173.0m)
Full Capex financed from operating cash flow
€ in thousands01 Apr 2016 – 31 Mar 2017 01 Apr 2017 – 31 Mar 2018
Change
YoY
STATEMENT OF CASH FLOWS
Operating result (EBIT) 6,649 90,286 >100%
Paid/received interests (15,962) (13,875) 13.1%
Income taxes paid (12,370) (26,015) (>100%)
Non cash bearing of profit or loss 112,207 141,705 26.3%
Cash flow from operating activities
before changes in working capital90,524 192,101 >100%
Changes in working capital 45,892 (48,910) (>100%)
Cash flow from operating activities 136,416 143,191 5.0%
Cash flow from investing activities (161,148) (193,389) (20.0%)
Cash flow from financing activities 54,872 135,547 >100%
Change in cash and cash equivalents 30,140 85,349 >100%
Operating free cash flow1) (104,253) 1,492 >100%
Free cash flow2) (24,732) (50,198) (>100%)
1) Cash flow from operating activities minus Net CAPEX2) Cash flow from operating activities minus cash flow from investing activities
Conference Call presentation: FY 2017/18 14
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Conference Call presentation: FY 2017/18 15
Market trendsMiniaturization and modularization still the main trends
15
Yole , AT&S AG (2018)
Mobile Phone
Desktop
Notebook
Smartphone
Tablet
Convertible
Internet
of
Things
AR&VR
Virtual
Reality
Artificial
Intelligence
(AI)
Smart Home
Smart Cities
Smart Speaker
Smartwatch
Datacenter/
ServerVehicle
electrificationAutonomous
driving
“real time”
Connectivity
(5G)
~ 2000 ~ 2010
COMPUTING &
CONNECTIVITY
+ SENSING + ACTUATING
~ 2020+
Conference Call presentation: FY 2017/18 16
Outlook for 2018/19
Seasonality expected for mobile devices segment, especially in Q1
Technology development projects in CHQ I as preparation of second phase in implementation
Further expansion in CHQ II depending on market development – next evaluation in mid-2018
Technology expansion and capacity increase in the area of autonomous driving at the sites in Nanjangud (India) and Fehring (Austria) currently implemented
Maintenance investments and minor technology upgrades of roughly € 70 to 100 million
Investments in capacity and technology expansion by another € 100 million depending on market development
Outlook 2018/19: Revenue growth by up to 6% and EBITDA margin at 20 to 23%
Core business with stable and growing demand in a competitive environment
Conference Call presentation: FY 2017/18 17
Medium-term strategy – More than AT&S
Path of value-added growth will be pursued consistently
Focus on leading position in terms of technology, quality and results
New revenue target of € 1.5 billion
EBITDA margin of 20 to 25%
Positioning as a leading high-end interconnect provider
Conference Call presentation: FY 2017/18 18
Questions & Answers
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse13 | A-8700 Leoben Tel +43 (0) 3842 200-0
www.ats.net
Conference Call presentation: FY 2017/18 19
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