AT&S continues its strong growth in Q1-Q3 21/22
AT&S reports very positive revenue developments in the first three quarters of 2021/22.
“Once again, we were able to significantly increase our revenue and earnings in a challenging market environment, with quarterly records in the double digits,” CEO Andreas Gerstenmayer said. “As the ramp-up of our new plant in Chongqing, China is progressing faster than expected, we can increase our current year revenue guidance to 28-30%. This once again confirms our growth strategy and therefore also strengthens our revenue projection of around 3.5 billion euros for the financial year 2025/26”, comments Gerstenmayer on the further development.
Consolidated revenue increased by 30% to 1,147 million euros in the first three quarters of 2021/22 (previous year: 884 million euros). Adjusted for exchange rate effects, the increase in consolidated turnover even amounts to 32%. This growth was mainly driven by additional capacity in Chongqing for ABF substrates. The broader application portfolio for mobile devices as well as modular printed circuit boards also contributed to the revenue growth. In the AIM business unit, all three segments supported the growth trend, with the industrial segment registering the largest increase. Despite the shortage of semiconductors, sales in the Automotive segment also increased, but not as dynamically as it would have been possible without this limitation.
EBITDA increased by 30% from €187 million to €244 million. While increased revenue had a positive impact on earnings, start-up costs in Chongqing and Kulim as well as rising material, transportation and energy costs had a negative effect on earnings. In order to live up to its role as a driver of innovation, AT&S continued to significantly increase its research and development expenses. Currency fluctuations in the US dollar and the Chinese renminbi had a negative impact of 30 million euros on the change in earnings; without these fluctuations, the growth rate would have been 47%.
Adjusted for start-up costs, EBITDA amounted to EUR 262 million (previous year: EUR 192 million), which is equivalent to an increase of 37%. Excluding start-up costs and currency fluctuations, profits would have increased by 53%.
EBITDA margin was 21.3% (EBITDA margin adjusted for start-up costs: 22.9%), below the prior year level of 21.1% (EBITDA margin adjusted for start-up costs: 21 .7%). Depreciation and amortization increased by €40 million to €161 million due to asset additions and technology upgrades. Nevertheless, the EBIT went from 66 million euros to 83 million euros. The EBIT margin amounts to 7.2% (previous year: 7.4%). Financial charges – net improved from € -20 million the previous year to € -11 million currently, mainly due to a change in currency effects. Profit for the period increased from €37 million to €62 million, resulting in an 81% increase in earnings per share from €0.79 to €1.42.
The financial situation is characterized by an increase in non-current assets at the end of the financial year. Total assets were €3,016 million, up 26% from March 31, 2021 due to asset additions and technology upgrades. The significant increase in total assets led to a decrease in the capital ratio of 2.0 percentage points despite a 19% increase in capital. The equity ratio stood at 31.6% as of December 31, 2021, thus exceeding 30% despite the large-scale investment program.
Cash and cash equivalents increased to €644 million (March 31, 2021: €553 million). In addition, AT&S has financial assets and unused credit lines of 336 million euros to guarantee the financing of the future investment program and short-term repayments.
In January, AT&S very successfully completed a €350 million hybrid bond issue, its largest capital markets operation since the IPO. Holders of the 2017 hybrid bond were invited to exchange their bond for this new bond. 76% of investors accepted this offer.
AT&S will focus on starting new production capacity at Chongqing Plant III, continue to advance the capital project in Kulim, Malaysia, and site expansion in Leoben, Austria, and implement technology upgrades to other sites in the current year.
Expectations for AT&S’ segments are currently as follows: Continued strong demand for IC substrates also offers significant medium-term growth opportunities. The 5G mobile communication standard will continue to drive growth in the field of mobile devices. A positive development is expected in the automotive segment despite the shortage of semiconductors. Driven by the deployment of 5G infrastructure, the Industrial segment will continue to experience positive development over the coming year. In the medical segment, AT&S expects a positive development for the current financial year.
The company still plans to invest up to 700 million euros in new capacities and technologies during the current financial year.
Due to faster ramp-up and additional efficiency improvements at Chongqing Plant III as well as generally strong demand in the fourth quarter, AT&S has raised its revenue development forecast and now expects revenue growth of 28-30% (previously: 21-23%). Adjusted EBITDA margin is still expected to be between 21-23%, not including around €25-35 million (previously: around €50 million) for the start-up of new production capacity in Chongqing and Kulim . The outlook is based on the assumption that no unexpected effects such as supply shortages, fluctuations in material and energy prices occur.
The progress of the expansion of production capacities in Chongqing, China, and Kulim, Malaysia, as well as the expansion of the site in Leoben, Austria, is still satisfactory despite the difficult global economic and health situation. Therefore, AT&S assumes that revenues of €3.5 billion will be generated in fiscal year 2025/26 and expects an EBITDA margin of between 27 and 32%.