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AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse13 | A-8700 Leoben Tel +43 (0) 3842 200-0 | E-Mail [email protected]
www.ats.net
AT&S first choice for advanced applications
Company Presentation
December 2015
2
AT&S – a world leading high-tech PCB company
Megatrend-driven markets with attractive growth potential
Entering a new high-end business segment by 2016
Pure high-end segment play Technology & quality leader Largest European PCB
producer Partner of choice for blue
chip customer base Balanced industry portfolio
Strong Asian production footprint with focus on high volume/low mix
European footprint: high mix/low volume
Operational excellence: Outstanding process know-how, productivity and efficiency
One of the most profitable players in the industry: above industry EBITDA margins
Strong cash flow generation Proven long term successful
financial track record
AT&S – Key Facts
Strong track record 1 Balanced portfolio / Global customer base 2
7%
€ in millions
3
Split revenue: Business Unit, H1 2015/16
Split revenue: Customer Region, H1 2015/16 based on sold to party
24%
6%
14%
56%
Germany/Austria
Other Europeancountries
Asia
Americas
488 514
542 590
667
302
387
96 103 102 127
168
72 93
47 42 31 54
90
40 51
2010/11 2011/12 2012/13 2013/14 2014/15 H12014/15
H12015/16
Revenue EBITDA EBIT
+5% +5% +9% +13%
+28%
Revenue growth
59% 41%
Mobile Devices &Substrates
Automotive,Industrial, Medical
4
Global footprint ensures proximity to supply chain & cost efficiency
European production facilities: high mix/low volume Asian production facilities: high volume/low mix
Sales network spanning three continents About ~8,600 employees
Plant Shanghai, China Staff: ~4,600
Plant Ansan, Korea Staff: ~300
Plant Nanjangud, India Staff: ~1,200
Plant Chongqing, China under construction Staff: ~1,200
Plant Leoben, Austria Headquarters Staff: ~ 1,000
Plant Fehring, Austria Staff: ~300
AT&S sales offices AT&S plants
► volatility due to seasonal effects
5
Balanced high-end product portfolio to level seasonality
Characteristic
Selected Applications
Segment
1) Based on external revenue € in millions in Q1 2015/16
Mobile Devices & Substrates
Advanced Packaging
Selected Market Leaders
GoPro
Sony
LG
Canon
Qualcomm
Blackberry
Lenovo
Huawei
Samsung
Xiaomi
ZTE
Intel
Apple
► stable business due to longer product life time
Includes the segment Advanced Packaging (in the process of being established) as well as group management and financial activities
Others
(Revenue € in millions)
(Revenue € in millions)
Automotive, Industrial, Medical
Revenue Share1)
Communication
Computing
Automotive: Lighting, thermal, sensors, safety, infotainment, powertrain
Medical: Patient monitoring, therapy, diagnostic
Industrial: Instrumentation & control, power solutions, lighting
Consumer Electronics
Osram
Hella
Siemens
General Electric
Continental
Harmann
EADS
Texas Instruments
ST Microelectronics
Freescale Semiconductor
RFMD
TDK-Epcos
Qualcomm
59%
41%
68.0 88.7
120.9 104.5 115.9 112.2
Q1 14/15 Q2 14/15 Q3 14/15 Q4 14/15 Q1 15/16 Q2 15/16
72.6 71.7 65.9 72.6 77.8 79.5
Q1 14/15 Q2 14/15 Q3 14/15 Q4 14/15 Q1 15/16 Q2 15/16
AT&S Positioning Strategy
Strategic focus on high-end technologies
High-end HDI PCBs and IC-Substrates
~30%
High-end technology share > 70% HDI and Anylayer PCBs, Embedding
Complementary technology share: <30%
SS, DS, ML, Flex, RF
Structure of general PCB market – based on technologies
Single-sided (SS), double-sided (DS), multilayer- (ML), flex and rigid-flex (RF) PCBs
~70%
AT&S Revenue structure in 2014 - based on technologies
7
Strategy: Selecting segments and applications
Market segments – selected by AT&S:
Mobile Devices & Substrates Automotive Industrial Medical
Attractive, specific application growth:
> 10 %
Potential for sustainable high EBITDA margins :
> 20 %
Technological fit: dense structures:
35 - 60 micrometer
Criteria for selection
Smartphones, Tablets, Ultrabooks, Wearables ..
Navigation, Advanced Driver Assistance Systems, Infotainment..
Machine-2-Machine Communication, Industrial Computer…
Hearing Aids, Patient Monitoring ..
1 2 3
Specific applications that show attractive, overall growth within our addressed market segments :
8
9
Market Player/Position HDI Technology
Source: Prismark, August 2014; NTI CY2013; AT&S Strategy
Market position HDI Technology
Revenue (US$ in millions)
Rank Country Supplier HDI Non HDI
PCBs IC-
Substrates Total
revenue
1 TWN Unimicron 682 671 795 2,148
2 TWN Compeq 538 509 - 1,047
3 AUT AT&S 530 248 - 778
4 KOR SEMCO 480 173 1,212 1,865
5 JPN Ibiden 426 - 1,080 1,506
6 USA TTM 406 962 - 1,368
7 TWN Zhen Ding 343 1,774 - 2,117
8 TWN Tripod 305 1,077 - 1,382
9 KOR DAP 279 21 - 300
10 TWN Unitech 236 304 - 540
Source: AT&S; Prismark (2015), JMS (2014), YOLE (2015) Advanced Packaging represents the “Embedded die – package” forecast. FC-Substrates represents “FC-BGA” and “FC-CSP” package substrates.
Market per Segments 2014 – 2019 [US$ in millions]
The Total PCB & Substrate Market will reach around 70 bn US $ in 2019
Overall Market development
Market per Technology 2014 – 2019 [US$ in millions]
10
CAGR 4% CAGR 4%
The world is changing – miniaturisation & modularisation as main drivers
11
2003/04 2013 2016 2024
?
Type Mobile Phone Smartphone System in Package All in One
PCB 125x55mm 85x20mm 30x30mm 20x20 ?
Form Factor 1 0.25 0.13 0.06 ?
Line/Space 100/100µm 40/40µm 30/30µm 20/20µm ?
Technology 1-n-1 Anylayer Anylayer&Embedding ?
12
General Description & Technology Application Areas Customer Base Market Size *
PCBs
PCBs are the interconnection platform for electric, electronic & mechanical components (such as resistors ,
capacitors, IC’s, connectors; etc.) Density: Line/ Space > 25micron
Computer, Consumer, Communication, Automotive
Industrial, Medical
OEM´s Tier 1 Tier 2
AT&S addresses a market of US$ 5.8bn
Substrate-like PCBs
Substrate-like PCBs are the next evolution of high-end HDI PCBs with higher density: Line/Space 20-30micron
Wearables and applications of the “Internet of Things”
OEM’s Tier 1 Tier 2
Technology in introduction, part of High –end HDI and
Low-end Substrate
market
* AT&S addresses part of a total market of USD 47.5bn/ source: Global Production Value 2014, Prismark, March 2015
AT&S’ answer: Extended Technology Portfolio starting 2016
Why AT&S is entering the substrate-like PCB market: Ongoing miniaturisation and increasing modularisation Positioning for next technology generation in early stage
13
General Description & Technology Application Areas Customer Base Market Size *
IC Substrates
IC-Substrates serve as interconnection platform with higher density (Line/Space < 15 micron) between
semiconductors (Chips) & PCBs
High-end processors for Computer, Communication,
Automotive, Industrial
OEM’s Semiconductor
Industry
AT&S addresses a market of US$ 5.1bn
* AT&S addresses part of a total market of USD 7,6bn/ source: Global Production Value 2014, Prismark, March 2015
Extended Technology Portfolio starting 2016
Why AT&S is entering the IC Substrate market? Market demand: “Advanced applications” need high-end microprocessors with increased performance Technology: „High-end PCB-Technology” and Substrate-Technology for Semiconductors is merging
Investment Project Chongqing - Overview
14
Location: Chongqing, Central China
Total investment: € 480m in first phase (until mid 2017)
Expected start-up costs of € 70-90m (€ 50-60m capitalised)
Expected CAPEX-revenue ratio: mean of 0.9 (at full expansion)
Expected ramp-up: > IC Substrates: Beginning of 2016 > Substrate-like PCBs: second half 2016
*at full expansion
Plant I Plant II
Products: IC Substrates Substrate-like PCBs
Capacity: 150,000 sqm/p.a.* 200,000 sqm/p.a.*
Layout Chongqing – IC-S & Substrate-like PCBs
Building 1: IC Substrate plant Specifications: Clean Room Class < 100
Building 2: Substrate-like PCB plant Specifications: Clean Room Class < 10,000 to
< 1,000 in special areas
15
(as of 30/09/2015)
Completion of Infrastructure
Start Equipment Characterisation
Certification
Start Training
Start Equipment Ordering
Plant Layout Product- Specification
Start of Production up to High Volume Mass Production
16
Q4 Q1 Q2 Q3
FY 2013/14
Q4 Q1 Q2 Q3
FY 2014/15
Q3
FY 2012/13
Q4 Q1 Q2 Q3
FY 2015/16
Q4 Q1 Q2 Q3
FY 2016/17
Q4
Investment as at 30/09/2015: € 182.4m1)
Progress according to time & budget: Characterisation for first line is ongoing, certification expected for end of 2015
Product mix: FCBGA Substrates for computing applications (Notebooks, PCs, etc.)
Start of production expected for beginning of 2016
Q4 2015/16 will be impacted by ramp-up costs
Project Status IC Substrates - Chongqing I
1) CAPEX for tangible fixed assets
Start Equipment Installation
Investment as at 30/09/2015: € 13.9m1)
First quantities of SLPs are already being produced in plant Shanghai
Construction of building II for SLP in Chongqing is ongoing
Start of production is scheduled for second half of 2016
Q4
Start Building & Infrastructure
Start of Production up to High Volume Mass Production
Q1 Q2 Q3
FY 2014/15
Q4 Q1 Q2 Q3
FY 2015/16
Q4 Q1 Q2 Q3
FY 2016/17 FY 2017/18
Q1 Q2 Q3 Q4
Equipment Installation
Qualification
17
Substrate-like PCBs – Chongqing II
(as of 30/09/2015)
1) CAPEX for tangible fixed assets
18
Driving Future Trends in Customer Segments: Internet of Things (IoT) and Application Structures
Healthcare
Glasses Wearable Electronics
Smart Mobility Autonomous Driving
Car2Car Communication
Smart City Smart Lighting
Smart Buildings Home/Building Automatisation
Energy Management
Smart Production/Industry 4.0 Automatisation/Robotics
Production Control Systems
Smart Healthcare Connectivity (e.g. online patient monitoring)
Smart Energy Smart Metering
30-50 billion of „Things“ will be connected in 2020
Wearables market forecast: USD 10 – 60 billion by 2018 Source: IHS, 2013
20
Sound top-line growth, above industry margins and increasing cash conversion
488 514
542
590
667
302
387 96 103 102
127
168
72
93
19.7% 20.1% 18.9%
21.6%
25.1% 23.9%
24.1%
€ in millions
71
87
72
105
144
34
56
Revenue Y-O-Y growth
Operating Cash Flow Y-O-Y development
EBITDA and EBITDA-margin
Continuous growth path up to full capacity utilisation
Revenue with products out of Asian production increased from 69% in 2010/11 to 80% in H1 2015/16
EBITDA increase due to good product mix, high capacity utilisation and efficiency and cost programs
EBITDA margin guidance FY 2015/16: >19% due to impact from ramp-up Chongqing plant
Operating cash flow generation driven by strong EBITDA performance
€ in millions € in millions
21
Capex & Staff
CAPEX CAPEX reflects investments in Chongqing project (whereof € 58.3m) and technology investments in existing locations .
113
40
90
165
89 98
2011/12 2012/13 2013/14 2014/15 H12014/15
H12015/16
STAFF* The increased headcount is primarily based on the Chongqing project.
7,417 7,321 7,027
7,638
8,555
2011/12 2012/13 2013/14 2014/15 H1 2015/16
123 609 54 1,152
* incl. leased personnel, FTE, average for the period (€ in millions)
Core business Employees project Chongqing
Financials H1 2015/16
22
€ in thousands (unless otherwise indicated)
01.04.2015 - 30.09.2015 01.04.2014 - 30.09.2014
STATEMENT OF PROFIT OR LOSS
Revenue 387,129 302,077
produced in Asia 80% 76%
produced in Europe 20% 24%
EBITDA 93,230 72,297
EBITDA margin 24.1% 23.9%
EBIT 50,742 39,928
EBIT margin 13.1% 13.2%
Finance costs - net 25 (2,363)
Income Taxes (8,630) (9,120)
Profit for the period 42,137 28,445
Cash Earnings 84,555 60,785
EPS in € 1.08 0.73
EBIT increase of 27.1%: high revenue and capacity utilisation and continuous improvement activities.
Revenue increase of 28.2%: 14.5% from organic growth and 13.7% from FX effects.
Effective group tax rate: 17.0%
23
Profit for the period and earnings per share
Earnings per share increased by 159.2%
23.3 23.3 23.3
30.8
38.9 38.9 38.9
1.51 1.14 0.62 1.24 1.78 0.73 1.08
-20
-15
-10
-5
0
0
10
20
30
40
50
2010/11 2011/12 2012/13 2013/14 2014/15 H12014/15
H12015/16
Number of shares, average number; in million pcs. Earnings per share; in €
Financials H1 2015/16
24
€ in thousands (unless otherwise indicated) 30.09.2015 31.03.2015
STATEMENT OF FINANCIAL POSITION
Non-current assets 750,340 712,757
Current assets 467,161 508,055
Equity 575,126 604,358
Non-current liabilities 413,287 413,070
Current liabilities 229,088 203,384
Total assets 1,217,501 1,220,812
Net debt 194,420 130,510
Net gearing 33.8 % 21.6%
Net working capital 120,551 95,319
Net working capital per revenue 15.6% 14.3%
Equity ratio 47.2% 49.5%
Decrease of 4.8% due to negative impact from FX out of translation. Improved for the period could not compensate the negative FX effects.
Increase of 49.0% due to higher CAPEX, paid dividends and increase in working capital.
25
Financial debt, cash and net debt
212
273 299
372
405
18 31
82
261 274
194
243
217
111 131
2010/11 2011/12 2012/13 2013/14 2014/15
Gross debt Cash Net debt
26
Net debt/EBITDA
2.0
2.3 2.1
0.9 0.8
2010/11 2011/12 2012/13 2013/14 2014/15
Expected multiple in temporary peak of Chongqing investments: < 3.5x
27
Overview Debt Portfolio Duration
Maturity
€ in millions < 1 Year 1-5 Years > 5 Years Total
Corporate Bond 4.3 99.8 - 104.1
Export Loans
32.0 - - 32.0
Public funds and other - 2.6 1.3 3.9
Bank Borrowings 14.7 220.0 34.1 268.8
Total 30/09/2015 51.0 322.4 35.4 408.8
Total 31/03/2015 46.0 321.6 37.7 405.3
Average debt portfolio duration: 3.4 years (2014/15: 3.8 years) Average financing costs: ~ 3 % after closing Promissory Note Loan € 170m of credit lines not utilised
Partly refinanced by promissory note loan issue of € 200m in October 2015
Financials H1 2015/16
28
€ in thousands 01.04.2015 – 30.09.2015 01.04.2014 – 30.09.2014)
STATEMENT OF CASH FLOWS
Profit for the period 42,137 28,445
Non cash bearing of profit or loss 43,255 40,312
Changes in Working Capital (29,757) (35,107)
Cash flow from operating activities 55,635 33,650
Cash flow from investing activities (97,485) (88,699)
Cash flow from financing activities (9,879) 12,618
Change in cash and cash equivalents (51,729) (42,431)
Increase is based on higher business activities.
Increase of € 22.0m – supports internal self financing power.
Continuous planned high CAPEX based on strategic investments in Chongqing and continuous upgrades of existing production facilities.
29
Net Working Capital Management
Net Working Capital Development - € in millions and in % of revenue
92
103
92 95
121
18.0% 19.0%
15.6%
14.3%
15.6%
2011/12 2012/13 2013/14 2014/15 H1 2014/15
Net Working Capital development Net Working Capital % of revenue
AT&S - Stock Profile
Listing: Vienna Stock Exchange,
Prime Standard
Indices: ATX Prime, WBI
ThomsonReuters (A): ATSV.VI
Bloomberg (A): ATS AV
3rd Quarter Results 2014/15 28 January 2016
Full year results 2015/16 10 May 2016
22nd Annual General Meeting 07 July 2016
30
Financial Calendar 1 year development / Daily volume
ATX Prime
AT&S
# of shares outstanding 38.85m
Avg. daily volume: 73.000 shares
Performance ytd: + 67.13%
Performance 1 year: + 66.21%
Dividend 2014/15: EUR 0.36/per share
Dividend yield: 2.5%
32
Outlook FY 2015/16
Provided a stable macroeconomic environment and continuous good customer demand Management expects an ongoing high level of capacity utilisation.
On the basis of the organic growth in the first half-year, an expected, positive business development in the next six months and an average assumed USD-EUR exchange rate of 1.16, the Management Board increases the revenue expected for the financial year 2015/16 from € 725m to € 740m.
Influenced by the expected costs of the start-up of the new plants in Chongqing, the EBITDA margin should exceed 19% (guidance at the beginning of the financial year: 18-20%). This includes an EBITDA margin in the core business at the level of the previous year.
34
AT&S Product Portfolio
HDI any-layer printed circuit
boards
HDI microvia printed circuit boards – high density interconnect
Multilayer printed circuit boards
Double-sided printed circuit boards
IMS printed circuit boards – insulated
metal substrate
Further technological enhancement to HDI microvia: All electrical connections in HDI any-layer boards consist of laser-drilled microvias. Advantage: further miniaturisation, and higher performance and reliability. AT&S produces HDI any-layer in 4 to 12 layers.
HDI: high density interconnect, meaning laser-drilled connections (microvias). HDI is first step towards miniaturisation. AT&S can produce 4-layer laser PCBs up to 6-n-6 HDI multi layer PCBs.
Found in almost every area of industrial electronics. AT&S produces printed circuit boards with 4 to 28 layers, in quantities from individual prototypes to small batches and mass production.
Used in all areas of electronics. AT&S focuses on double-sided printed circuit boards with thicknesses in the range of 0.1-3.2 mm.
IMS: insulated metal substrate. Primary function: heat dissipation for use mainly with LEDs and power components.
Production site Shanghai
Shanghai, Leoben
Leoben, Nanjangud, Fehring
Fehring, Nanjangud
Fehring
Applications Smartphones, Tablets, Notebooks
Mobile phones and nearly all electronic applications including automotive (navigation, infotainment and driver assistance systems)
Used in all electronic applications including touch panels, and in products ranging from aircraft to motorcycles, from storage power plants to solar arrays
Primarily industrial and automotive applications
Lighting industry
35
AT&S Product Portfolio
Flexible printed circuit boards
Semi-flexible printed circuit boards
Rigid-flex printed circuit boards
Flexible printed circuit boards on aluminium
AT&S patented technologies
Used to replace wiring and connectors, allowing for connections and geometries that are not possible with rigid printed circuit boards.
More limited bend radius than flexible printed circuit boards. The use of a standard thin laminate makes them a cost-effective alternative.
Combine the advantages of flexible and rigid printed circuit boards, yielding benefits for signal transmission, size and stability.
Used when installing LEDs in car headlights, for example, where the printed circuit board is bonded to an aluminium heat sink to which the LEDs are then attached.
Production site Ansan, Fehring
Fehring
Leoben, Ansan
Ansan
Applications Nearly all areas of electronics, including measuring devices and medical applications
Automotive applications
Industrial electronics, such as production machines and industrial robots
Lighting, automotive, building lighting
ECP: Embedded Component Packaging ECP® is a patented AT&S packaging technology used to embed active and passive electronic components in the inner layers of a printed circuit board. ECP® technology is used in ever smaller, more efficient and more powerful devices, such as smartphones, tablets, digital cameras and hearing aids. Production site: Leoben
2.5D® Technology Platform Combines mechanical and electronic miniaturisation, and enables partial reduction of the thickness of a circuit board. Advantage: populated assemblies have a thinner profile. Can be also used to make cavities in the printed circuit board, e.g. for acoustic channels. Major application for this technology is the 2.5D® rigid-flex printed circuit board, a lower cost alternative for flex-to install applications. Production sites: Leoben, Shanghai
Management
36
Andreas Gerstenmayer, CEO
Joined AT&S as CEO in 2010 Previous positions include:
18 years of work experience at Siemens, including Managing Director with Siemens Transportation Systems GmbH Austria and CEO of the Drive Technology business unit in Graz from 2003 to 2008
Partner at FOCUSON Business Consulting GmbH after leaving Siemens Education and other positions:
Member of the Research Council of Styria Degree in Production Engineering from Rosenheim University of Applied Sciences
Heinz Moitzi, COO
COO since 2005; with AT&S since 19811) Previous positions include:
Various management positions within AT&S Measurement engineer with Leoben University of Mining and Metallurgy
Education: Degree from Higher Technical College of Electrical Engineering
Karl M. Asamer, CFO
Joined AT&S as CFO in 2014 Previous positions include:
Managing Director of GEKA Group in Germany Managing Director of Sell GmbH in Germany
Education: Degree: doctorate in business administration in Linz, Austria
1)He was already with the founding company of AT&S
Five core dimensions of sustainability within AT&S
Energy and carbon footprint
Water
AT&S – a learning organisation
Resources
Thinking ahead – shaping the future
CSR gains importance in long term success Improving efficiency Motivated and qualified staff
CSR as a key to sustainable business success
38
The importance of sustainability is rising within:
Authorities (basis for securing operation licences)
Customers (relevant for placing orders)
AT&S saves CO2 and Water…
39
Sustainability – Figures and Fields of Action
AT&S aims to minimise its environmental footprint by reducing the CO2 emissions per m2 PCB attributable to production processes by 5% a year.
AT&S aims to reduce the Group‘s annual fresh water consumption per m2
PCB by 3%.
765.2
834.7
783.9
734.0
2011/12 2012/13 2013/14 2014/15
Freshwater consumption
In liters per sqm weighted PCB
1)
47.4
51.0 50.7
49.0
2011/12 2012/13 2013/14 2014/15
CO2-Footprint
1)
In kg per sqm weighted PCB
1) Since 2012/13 calculation according to EICC standards before that AT&S internal calculation
Visit: www.ats.net; Twitter @AT&S IR_PR; YouTube AtundS
40
AT&S – first choice for advanced applications
IR Contact: Elke Koch Fabriksgasse 13, 8700 Leoben/Austria Tel: +43 3842 200 5925 Mobile: +43 676 8955 5925 Fax: +43 3842 200 15909 [email protected] www.ats.net
Disclaimer
41
This presentation is provided by AT & S Austria Technologie & Systemtechnik Aktiengesellschaft, having its headquarter at Fabriksgasse 13, 8700 Leoben, Austria
(“AT&S”), and the contents are proprietary to AT&S and for information only.
AT&S does not provide any representations or warranties with regard to this presentation or for the correctness and completeness of the statements contained therein,
and no reliance may be placed for any purpose whatsoever on the information contained in this presentation, which has not been independently verified. You are
expressly cautioned not to place undue reliance on this information.
This presentation may contain forward-looking statements which were made on the basis of the information available at the time of preparation and on management‘s
expectations and assumptions. However, such statements are by their very nature subject to known and unknown risks and uncertainties. As a result, actual
developments, results, performance or events may vary significantly from the statements contained explicitly or implicitly herein.
Neither AT&S, nor any affiliated company, or any of their directors, officers, employees, advisors or agents accept any responsibility or liability (for negligence or
otherwise) for any loss whatsoever out of the use of or otherwise in connection with this presentation. AT&S undertakes no obligation to update or revise any forward-
looking statements, whether as a result of changed assumptions or expectations, new information or future events.
This presentation does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities, and neither this
presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. This presentation does not constitute any financial analysis
or financial research and may not be construed to be or form part of a prospectus. This presentation is not directed at, or intended for distribution to or use by, any
person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation or which would require any registration or licensing within such jurisdiction.