02.08.2019, 7301 Zeichen

Corporate news transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is responsible for the content of this announcement.
Quarterly Report
Leoben - First Quarter 2019/20
Revenue stable thanks to strong development in IC Substrates and Medical & Healthcare segments\nStrong seasonality for mobile devices and weak demand in the Automotive and Industrial segments push EBITDA margin down to 15.7%\nManagement confirms annual guidance for revenue and EBITDA margin\nInvestment project of up to EUR 1 billion initiated and medium-term guidance significantly increased\nLeoben, 2 August 2019 - In the first quarter of 2019/20 the business of AT&S recorded a stable development overall: Revenue, at EUR 222.7 million was stable at the prior-year level, with revenue from the Mobile Devices and Industrial segments decreasing. The declines were largely offset by volume increases in the IC Substrates and Medical & Healthcare segments. Demand in the area of IC substrates, which is strategically important for the Group, is very positive. This is confirmed by the decision of the Management Board to make substantial investments in the further expansion of this segment.
Earnings for the quarter declined as expected: EBITDA fell to EUR 34.9 million (previous year: EUR 52.0 million) and the EBITDA margin dropped to 15.7% (previous year: 23.4%), leading to EBIT of EUR -0.6 million (previous year: EUR 18.3 million). Finance costs -net declined from EUR 1.7 million to EUR -1.7 million, primarily due to foreign currency differences. The net loss for the period amounted to EUR -6.2 million (previous year: EUR 13.5 million).
The reasons for the current earnings figures can be found both in the market and in the substantial future investments in the strategic expansion of the business. With respect to the market, mobile devices were faced with increased seasonality in the past two quarters. In addition, the Automotive and Industrial business slowed down reflecting the general economic situation. Both aspects lead to underutilisation of the production capacities and a lower operating performance.
AT&S is increasing investments in research & development to prepare for future technology generations and to pursue its modularisation strategy. These expenses secure the company's sustainability and significantly expand the earnings potential in the medium term.
The asset and financial position remained very solid at the reporting date for the first quarter. The equity ratio declined slightly by 2.2 percentage points to 42.8% compared with the balance sheet date, which was mainly currency related. Cash and cash equivalents amounted to EUR 286.1 million. In addition, financial assets of EUR 250.4 million and unused credit lines of EUR 185.3 million are available to secure the financing of the future investment programme and short-term repayments.
FINANCIALS 2018/19 2019/20 Acc. to IFRS; in EUR 01.04.-30.06.2018 01.04.-30.06.2019 Change million Revenue 222.1 222.7 0.3% EBITDA 52.0 34.9 -32.9% EBITDA margin (in %) 23.4 15.7 EBIT 18.3 -0.6 >-100% EBIT margin (in %) 8.3 -0.3 Profit/loss for the 13.5 -6.2 >-100% period Cash flow from 4.6 28.5 >100% operating activities Net CAPEX 17.1 49.7 >100% Net debt 150.3* 208.6** 38.8% Earnings per share 0.30 -0.20 >-100%

*) As of 31.03.2019 **) As of 30.06.2019
To strengthen the IC substrate business, the Group decided in July to further expand capacity at the locations in Chongqing and Leoben. The investment volume totals up to EUR 1 billion and will be distributed over the next five years. The start of production is scheduled for 2021. First revenues from these additional capacities are expected for early 2022. The investment focus is on Chongqing. This decision was triggered by the significantly growing market demand for IC substrates for the application in high-performance modules in the coming years. This gives AT&S the opportunity to significantly strengthen its position in the market for IC substrates. As a result of expanding its business volume with these applications, AT&S will be able to further balance out the entire product portfolio and to reduce dependencies. This capacity expansion also provides the basis for a further diversification of the customer portfolio in the future.
The investment project will be implemented in close cooperation with a leading semiconductor manufacturer. In addition to production, the partnership also comprises the technology development of future substrate architectures.
Based on the high earnings power, AT&S will finance the new project primarily out of existing funds. The investment amounts will fluctuate over the five years depending on the respective project phases.
"In line with the industry, we assume that the market for high-performance computer modules will grow strongly in the coming years. The strategy to massively support the trend of modularisation addresses many applications in the electronics industry and consequently also the area of microprocessors," Andreas Gerstenmayer, CEO of AT&S AG, comments on this important step.
After the first quarter, the Management Board confirms the earnings forecast for the full year although the market environment is very challenging and visibility is still low. Based on the current weakness in demand in the Mobile Devices, Automotive and Industrial segments, revenue is expected to remain at the level of the previous year, with an EBITDA margin expected in the range of 20% to 25%. A volume of EUR 80 to 100 million is planned for basic investments (maintenance and technology upgrades). Depending on the market development, an additional EUR 100 million for capacity and technology upgrades may be incurred. For the capacity expansion in the area of IC substrates, expenses for investments will be increased from EUR 80 million to up to EUR 180 million.
With the current investment decision, the Management Board is increasing its medium-term guidance: As part of the strategy "More than AT&S", the Group expects revenue to double to EUR 2 billion in the next five years (previous revenue guidance: EUR 1.5 billion). This corresponds to a compound annual growth rate (CAGR) of roughly 15%. Based on the stronger focus on high-end applications, the historical trend of a continuous and sustainable margin improvement can be continued, and an EBITDA margin in the range of 25% to 30% can be achieved in the medium term. The Group's medium-term ROCE target is more than 12%.
end of announcement euro adhoc
issuer: AT & S Austria Technologie & Systemtechnik Aktiengesellschaft Fabriksgasse 13 A-8700 Leoben phone: 03842 200-0 FAX: mail: ir@ats.net WWW: www.ats.net ISIN: AT0000969985 indexes: ATX GP, WBI, VÖNIX stockmarkets: Wien language: English
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