AT&S Posts Revenue Increase of 19.4% to EUR 584.3M in Q3 2015/16

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AT&S AG, one of the global technology leaders for high-end printed circuit boards (PCBs), clearly increased revenue and operative results in the first nine months, which ended on 31 December 2015, compared to last year’s period.

For the financial year 2015/16, AT&S continues its growth course in the first nine months. Guidance for full year confirmed.

Comparison with Q3 2014/15:

• Revenue increases by 19.4% to EUR 584.3 million
• EBITDA up 10.2% to EUR 140.2 million / EBITDA margin: 24.0%
• Profit for the period EUR 60.2 million, up 19.6% on previous year
• Earnings per share increased from EUR 1.29 to EUR 1.55
• Certification of new IC Substrate plant in Chongqing in final phase
• Guidance for full year confirmed

“After a very positive first half year, demand at the end of the third quarter showed some slight slow-down for mobile devices. Based on the first nine months we were able to uphold the exceptionally high level of the previous year and once again outperformed the market, which only grew by an average of 1.5% in the same period“, says AT&S CEO Andreas Gerstenmayer.

Revenue and Earnings

This development led to an increase in revenue by 19.4% from EUR 489.4 million to EUR 584.3 million. The significant growth was based on the fact that demand for PCBs for mobile devices was untypically high in the first half of the year, and on continued high demand for automotive applications. Organic growth amounted to 7.6% or EUR 37.0 million. Higher exchange rates compared with the previous year, in particular EUR-USD, contributed 11.8% or EUR 57.9 million to revenue.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by EUR 12.9 million or 10.2% in the first nine months, from EUR 127.3 million to EUR 140.2 million. In addition to the high production output, this gratifying result was also attributable to a good product mix. Exchange rate effects accounted for a positive contribution of EUR 10.9 million and resulted from positive USD effects as well as negative effects arising from revenue charged in euros while the related production costs were incurred in Indian rupees, South Korean won and Chinese renminbi.

The EBITDA margin amounted to 24.0% in the first nine months, thus 2.0 percentage points below the very high level of 26.0% in the previous year, which was characterised by income from a compensation payment in the second quarter and above-average demand for mobile devices in the third quarter. With this EBITDA margin, AT&S is still one of the most profitable PCB producers worldwide.

Profit rose by EUR 9.9 million or 19.6%, from EUR 50.3 million to EUR 60.2 million, due to the positive business development, a significant improvement in the financial result (EUR -2.7 million vs. EUR -4.4 million in the previous year) and a lower tax rate of 18.0%. This results in an improvement in earnings per share from EUR 1.29 to EUR 1.55.

Cash flow and statement of financial position

Based on the very positive earnings development, cash flow from operating activities before changes in working capital was up 6.6% and amounted to EUR 123.4 million (Q1-Q3 2014/15: EUR 115.8 million).

Cash flow from investing activities – investments in the plant under construction in Chongqing and technology investments at other locations – totalled EUR 175.7 million (Q1-Q3 2014/15: EUR 130.4 million)

Despite a higher profit, equity declined slightly by EUR 4.8 million or 0.8% to EUR 599.6 million due to negative currency effects. Consequently, the equity ratio, at 40.6%, was 8.9 percentage points lower than at 31 March 2015 also due to the fact of the issue of a promissory note loan of EUR 221.0 million.

Net debt rose by EUR 61.9 million or 47.4% to EUR 192.4 million in the first nine months. This expected increase is the result of high investment activities related to the set-up of the plants in Chongqing and the dividend paid. The net gearing ratio, at 32.1% at 31 December 2015, thus exceeded the level of 31 March 2015.

Business Unit Mobile Devices & Substrates

Accumulated demand for high-end HDI printed circuit boards in the first nine months was still very good, but experienced a slight slow-down at the end of the third quarter. Moreover, exchange rates, which are still favourable from a euro perspective, had a positive impact. Overall, this led to a substantial increase in revenue by EUR 88.6 million or 26.8%, from EUR 331.0 million to EUR 419.6 million compared with the reporting period of the previous year. Revenue from external customers amounted to EUR 351.5 million, which corresponds to a 26.6% increase. EBITDA was up 13.8% to EUR 109.1 million. At 26.0%, the EBITDA margin was three percentage points below the very high level of the previous year and was affected by unfavourable exchange rate developments from sales between the business units.

Business Unit Automotive, Industrial, Medical

With an increase by EUR 22.6 million or 10.1%, this segment improved revenue from EUR 224.1 million in the previous year to EUR 246.7 million. The main driver was the continuously growing demand by the automotive sector, which reflects the trend towards more electronic components in vehicles, and by the medical segment. Demand in the industrial segment was slightly below the high level of the previous year. The segment was impacted by currency-related increases in production costs in India and Korea, which could only partially be passed on to customers. Overall, this led to a decline in EBITDA by EUR 2.3 million or 8.3% to EUR 24.9 million. The EBITDA margin decreased by 2.0 percentage points from 12.1% to 10.1%.

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