AT&S Maintains Stable Revenue Amid Challenging Market Conditions

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AT&S maintained its revenue at the prior-year level despite the difficult overall market situation. “We were able to maintain the revenue level of the prior-year quarter despite difficult conditions, and even improved our adjusted operating result. However, the weak market environment is reflected in our planning assumptions”, explains Peter Schneider, Spokesman of the Management Board and EVP of the Electronics Solutions business unit. The successfully initiated transformation process will be pursued consistently and AT&S is preparing for further growth. “We expect average annual revenue growth of approximately 20 percent in the coming two years due to the opening of our two new plants in Malaysia and Austria”, Schneider says and emphasizes, “In addition, we are expanding our leading technology position for printed circuit boards and substrates. This will bring us new renowned customers and consequently better protection for future market cycles.”

CFO Petra Preining explains, “The extreme price pressure is omnipresent in the industry. We are now prepared for it and continuously adapt our measures.” And Preining adds, “We are strengthening our financial position through the cash inflows from the sale of our plant in Ansan. Nevertheless, we are intensively reviewing which investments we will make in the coming years.”

In comparison with the prior-year period, consolidated revenue was constant at € 1,197 million in the first three quarters of the financial year 2024/25 (PY: € 1,205 million). AT&S recorded a positive volume development during the reporting period, which was, however, offset by continuing high price pressure for both printed circuit boards and IC substrates.

EBITDA declined by 13% from € 268 million to € 232 million. The decline in earnings is primarily attributable to the increased price pressure and higher start-up costs. In order to counter effects such as price pressure and inflation resulting from the currently difficult market environment, AT&S continues to intensively drive its comprehensive cost optimization and efficiency program. In addition to price pressure, start-up costs in Kulim, Malaysia, and Leoben, Austria, as well as costs related to the cost optimization and efficiency program had a negative impact on earnings. Adjusted for these costs, EBITDA amounted to € 332 million (PY: € 321 million), which corresponds to an increase by 4%.

The adjusted EBITDA margin was further increased and amounted to 27.7% (previous year: 26.6%). The reported EBITDA margin (not adjusted for start-up and restructuring costs) amounted to 19.4% (previous year: 22.2%).

Depreciation and amortization increased by € 29 million to € 233 million (19% of revenue) due to additions to assets and technology upgrades. EBIT fell from € 63 million to € -1 million. The EBIT margin amounted to        -0.1% (PY: 5.3%). Finance costs – net declined from €- 41 million in the previous year to € -65 million primarily due to higher interest expenses. This development was mainly driven by a significant increase in financial liabilities and the related financial expenses. Profit for the period decreased from € 7 million to        € -95 million, leading to a decline in earnings per share by € 2.63 from € -0.16 to € -2.79 €.

Cash flow from operating activities decreased to €-29 million in the first three quarters of 2024/25 (previous year: € 497 million). The company is in the final stage of negotiating the realignment of the international factoring program, which is expected to be applied from February 2025.

The asset and financial position at December 31, 2024 is still characterized by investing activities and the associated financing activities. Total assets increased due to an increase in receivables and property, plant and equipment, among other things. The equity ratio improved slightly by 0.2 percentage points to 20.9% due to positive exchange rate effects in other comprehensive income (OCI).

Cash and cash equivalents decreased to € 550 million (March 31, 2024: € 676 million). In addition, AT&S has unused credit lines of € 134 million to secure the financing of the future investment program and short-term repayments.

Sale of AT&S Korea

AT&S successfully completed the sale of the plant in Ansan, Korea, to the Italian company SO.MA.CI.S. as of January 31, 2025, thus further sharpening the Group’s strategic profile. The purchase price (equity value) amounts to € 405 million and approximately € 17 million of interest income (equity ticker). The transaction is offset by a disposal of carrying amount of € 73 million (as of March 31, 2024). The management expects the transaction to result in cash inflows after tax of € 386 million, of which € 79 million was already received in the form of dividend payments and a prepayment as of December 31, 2024. EBITDA will increase by approximately € 325 million as a result of the sale. The net debt/EBITDA ratio will fall from currently 6.1 to less than 3. The gain from the sale will not be included in the adjusted EBITDA margin.

Georg Riedl Chairman of the Supervisory Board

In the past quarter, AT&S mourned a great loss when Hannes Androsch passed away. The development of AT&S had been inextricably linked with Mr. Androsch since 1994, when Androsch, together with Willibald Dörflinger and Helmut Zoidl, took over the company from ÖIAG.

On December 18, 2024, Georg Riedl became Chairman of the Supervisory Board of AT&S AG. Riedl is an attorney at the law firm Frotz Riedl Rechtsanwälte. He was previously First Deputy Chairman of the Supervisory Board and was initially appointed to the AT&S Supervisory Board on May 28, 1999.

Expected market environment

The development of the different market segments still shows significant discrepancies. While volume in the areas of mobile devices, computers and communication infrastructure proves to be stable and has shown seasonal growth, the automotive segment is stagnating and the industrial segment continues to be weak. AT&S expects this weakness, which primarily affects Europe, to continue into the next financial year. Although overall PCB prices declined to a lesser degree than in the previous year, price pressure is persisting to a large extent. In the area of substrates, pressure on prices remains unchanged.

In the printed circuit board segment it is above all mobile devices and data centers that show positive forecasts and drove the PCB market in the last quarter. In addition to increased investments in servers, the related communication infrastructure is being further expanded. At the same time, lower demand for e-mobility and a general economic weakness continue to burden demand for automotive and industrial printed circuit boards. Automotive and industrial inventory levels are also still high and are currently being reduced.

In the area of IC substrates, the market benefited from the recovery of client computing demand and special AI chips, whereas the classic server segment continues to be subdued. An upturn is largely dependent on a general economic recovery and is therefore not expected this year.

Outlook 2024/25

Despite a few bright spots in the market, economic pressure is persisting; therefore, market recovery effects are only slowly becoming apparent. As a result, the company anticipates price pressure to continue beyond the end of the fiscal year. To counter this effect, the company is intensifying and further focusing on the ongoing efficiency programs. In addition to comprehensive cost-cutting measures, a reduction of up to 1,000 employees is taking place at the existing locations, which has now been nearly completed.

The management is planning investments of just under € 500 million (previously: roughly € 500 million) for the financial year 2024/25 depending on the market environment and progress of projects. The majority of these investments will be used for the IC substrate production at the new plants in Kulim and Leoben.

The management expects the volatile order behavior of a key customer to continue and the weakness of the European automotive and industrial markets to persist in the last quarter of the financial year 2024/25. As already communicated in the half-year results, high-volume production at the two new plants will start one to two quarters later than originally planned. The company therefore expects the first contributions to revenue from these plants in the first quarter of the new financial year 2025/26. Accordingly, the costs incurred until then will be reported as start-up costs – in the fourth quarter of 2024/25 these should amount to just under € 20 million.

AT&S expects to generate annual revenue of between € 1.5 and 1.6 billion in the financial year 2024/25 and thus confirms the guidance for the current financial year. Excluding the effects from the start-up of the new production capacities in Kulim and Leoben and one-off costs from the implementation of the cost optimization and efficiency program (including garden leave) of up to € 110 million and excluding the gain from the sale of the plant in Ansan, the adjusted EBITDA margin is expected to be between 24 and 26%.

The revenue and EBITDA contributions of the plant in Ansan will be included in the respective items of the consolidated statement of profit or loss until the sale process is completed (IFRS 5, Disposal Group). The gain from the sale will not be included in the adjusted EBITDA margin.

Outlook 2026/27

The production capacity expansion in Kulim and the expansion of the site in Leoben are still developing positively despite the currently challenging global economic situation. Nevertheless, AT&S had to adjust the outlook for the financial year 2026/27 on December 17, 2024. The adjustments are due to a persistent weakness of the market coupled with overcapacities for printed circuit boards and IC substrates, and the resulting price pressure. AT&S now assumes that revenue of approximately € 2.1 to € 2.4 billion (previously: € 3 billion) will be generated in the financial year 2026/27 and expects an EBITDA margin of 24 to 28% (previously: 27 to 32%). This forecast does not include potential revenue from the second plant built by AT&S in Kulim. The management monitors the currently tense geopolitical situation very carefully in order to be able to respond to developments at any time and to make strategic adaptations.