AT&S Returns to Profit in Q3 as Revenue and Outlook Remain on Track

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AT&S returned to positive net profit in the third quarter, driven by a 10% revenue increase to €1.3 billion, strong EBITDA margins, planned contributions from its Kulim and Leoben plants, and a confirmed outlook for FY2025/26 and FY2026/27 despite currency headwinds.

“The third quarter has impressively shown that we are on the right track operationally,” says AT&S CEO Michael Mertin. “On the one hand, our consistently implemented efficiency program is taking effect; on the other hand, the market environment for the technology industry has improved. And finally, our plants in Kulim, Malaysia, and Leoben, Austria, are contributing to revenue so that we recorded positive EBIT again. Against this backdrop, we are convinced that we will achieve our annual targets in full. The investments of the past years are beginning to bear fruit, creating a solid basis for generating sustainable value from the current market recovery.”

Third Quarter of 2025/26

In the third quarter of 2025/26, the new plants in Kulim and Leoben contributed noticeably to growth and AT&S increased consolidated revenue by 18% year-on-year – adjusted for currency effects by 27%. Thanks to the extensive cost optimization and efficiency program and a better pricing environment, EBITDA rose by 64% – adjusted for currency effects by 105%.

AT&S recorded a positive net profit for the period of € 24 million (PY: € -33 million), leading to earnings per share of € 0.51 (PY: € -0.95) and, together with currency effects, to an increase in the equity ratio by 1.6 percentage points to 20.8% compared to the half-year figure as of September 30, 2025.

Nine Months 2025/26

In comparison to the prior-year period, consolidated revenue increased by 10% to € 1.3 billion in the first three quarters of 2025/26 (PY: € 1.2 billion). Adjusted for currency effects, consolidated revenue even rose by 16 %. Due to a positive volume development, AT&S was able to successfully counter negative exchange rate effects during the reporting period.

EBITDA improved by 28% from € 232 million to € 297 million ‒ adjusted for currency effects, the increase amounted to 46%. The earnings improvement is primarily due to higher volumes, the comprehensive cost optimization and efficiency program and a better pricing environment. The EBITDA margin amounted to 22.6%, significantly exceeding the prior-year level of 19.4%. Depreciation and amortization increased by € 30 million to € 263 million (20% of revenue) due to additions to assets and technology upgrades.

EBIT increased from € -1 million to € 34 million despite considerable negative currency effects. The EBIT margin amounted to 2.6% (PY: -0.1%). Finance costs – net declined from € -65 million in the previous year to € -80 million, which was primarily attributable to negative exchange rate effects. At € -39 million, the net loss for the period was notably diminished (PY: € -95 million), leading to an improvement in earnings per share by € 1.44 from € -2.79 to € -1.35.

Cash flow from operating activities amounted to € 332 million, exceeding the prior-year figure by € 361 million. This was primarily driven by resuming the international factoring program, which was reorganized, and an improvement in trade and other payables. Operating free cash flow was clearly positive at € 223 million, improving by approximately € 580 million compared to the prior-year period.

Total assets, at € 4,613 million at the end of December 2025, remained virtually unchanged compared to the beginning of the financial year, but recorded a significant increase in liquid funds. The equity ratio decreased by 2.4 percentage points to 20.8% due to negative exchange rate effects in other comprehensive income (OCI) and the loss for the period.

Cash and cash equivalents increased to € 843 million (March 31, 2025: € 485 million). Unused credit lines totaled € 43 million. The net debt/EBITDA ratio of the last twelve months declined from 2.5 (as of March 31, 2025) to 2.0.

New Management Board Structure

With effect from February 1, 2026, CFO Gerrit Steen joined the company. At the same time, the Management Board was reduced to three members – Michael Mertin, CEO and Chairman of the Management Board, Peter Griehsnig, CTO, and Gerrit Steen, CFO.

Cost Optimization and Efficiency

Cost reduction measures are further intensified in the financial year 2025/26. All investments are subject to thorough review. After reducing the cost base by € 120 million in the previous year, it will now be sustainably decreased by at least another € 160 million, therefore exceeding the original target of € 130 million. The goal is to compensate for the effects of the ongoing challenging market environment and for the start-up costs of the additional production lines in Kulim. 

Expected Market Environment

Geopolitical uncertainties caused some companies to reduce inventory levels or place orders early. Overall, these effects had no impact on the general market situation, which improved compared with the previous quarter.

The data center and server segment continues to be the driver: Here, demand continues to be stable. Demand is particularly strong for high-end products developed for artificial intelligence. There is an ongoing trend towards high-end IC substrates in this area, from which AT&S will continue to benefit.

Despite continuing geopolitical tensions, demand developed positively in most other markets. Notebooks show a positive picture, which is in part attributable to the progress made in artificial intelligence and renewal cycles, but also to a shift in seasonality for fear of potential tariffs. Likewise, the smartphone market is strong.

In the industrial and automotive segments, only moderate growth is expected for 2025, one of the reasons being inventories that have not been fully reduced yet. The situation is particularly challenging in the area of e-mobility, where the currently low demand is weakening the market environment. Moreover, tariffs as well as political and legal obstacles in the USA and the EU are causing additional burdens.

Outlook 2025/26

AT&S expects to generate annual revenue of approximately € 1.7 billion in the financial year 2025/26 (2024/25: € 1,590 million), which – adjusted for currency effects and the sold plant in Ansan – corresponds to operational growth of approximately 20% compared to the previous year. The expected EBITDA margin of approximately 23% will still reflect the start-up costs of the additional lines in Kulim (2024/25 incl. proceeds from the sale of the plant in Ansan, Korea: 38.1%; adjusted for the proceeds: 17.7%). The management plans CAPEX of roughly € 200 million (2024/25: € 415 million). The majority of these investments will be used for expanding the IC substrate production at the new plant in Kulim. AT&S expects EBIT and free cash flow from operating activities to be positive.

Outlook 2026/27

AT&S anticipates continuing strong and growing demand for products with high added value, especially for generative artificial intelligence. But the established markets such as servers for companies, PCs & notebooks have also recovered. Moreover, AT&S has decided to increasingly serve the defense sector. In the future, the company will work even more closely with its customers to ensure that production increases can be reliably implemented. At the same time, this close cooperation will enable a structured introduction of new products and contribute to strengthening joint development activities in the long term. Against this positive market backdrop, AT&S currently assumes that revenue of approximately € 2.1 to € 2.4 billion will be generated in the financial year 2026/27 and expects an EBITDA margin of 24 to 28%.

AT&S generates more than three quarters of its revenue with US companies, and the majority of its revenues in US dollars. Production costs are largely incurred in Asian currencies, while the reporting currency is the euro. Since the publication of the forecast for 2026/27 in December 2024, the US dollar has fallen against the euro, from 1.07 US dollars per euro to approx. 1.17 US dollars per euro, which corresponds to a decline by roughly 10%. As a result, the management’s revenue expectations shifted from the upper to the lower end of the expected revenue range. Further changes in exchange rates – positive or negative – would have an impact on the revenue forecast.

In addition to these general market dynamics, raw material shortages could pose a challenge. Fiberglass mats – in particular E-glass and the technically more sophisticated T-glass – are essential components in the structure of PCBs and IC substrates. T-glass is indispensable for large-format and complex IC substrates. Last year, there were already indications of potential supply chain bottlenecks in the market, in particular due to the dependence on one central supplier. AT&S responded early and qualified additional suppliers together with its customers in order to increase supply security. Some of these new partners are in the process of building their production capacities and are currently not yet able to supply the full quantities required. Therefore, there is a certain risk that AT&S, as well as competitors, may not be able to fully meet all customer requirements, which were recently revised upwards, in the second half of the financial year 2026/27. While such a shortage would limit the production volume, it could have a positive effect on IC substrate prices.

The forecast does not include a potential escalation of the currently smoldering trade dispute, a significant shortage of fiberglass mats or a further devaluation of the US dollar. 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.