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AT&S continued its growth course unabated in the first quarter of the financial year 2022/23. Thanks to the successful implementation of its strategy, the company achieved record revenue and earnings levels. “Despite a difficult environment, we demonstrated once again that we have been focusing on the right markets,” says CEO Andreas Gerstenmayer. “We are on track to meet our short- and medium-term targets, both in strategic and in operational terms. We are aiming for revenue of roughly € 2.2 billion in the financial year 2022/23, with an adjusted EBITDA margin of 27 to 30%. If the build-up of additional production capacity in Chongqing, Kulim and Leoben continues as planned, we will generate revenue of 3.5 billion euros already in the financial year 2025/26, with an EBITDA margin of 27 to 32%,” Gerstenmayer comments on the further development.
Consolidated revenue improved by 58% to € 503 million in the first quarter of the financial year 2022/23 (PY: € 318 million). Adjusted for currency effects, consolidated revenue rose by 44%. It should be noted that the increase was again supported by all segments. Solid demand for ABF substrates, which was satisfied to an even greater extent due to the additional capacities in Chongqing, China, proved to be the key driver of this positive development. Furthermore, the strategy to broaden the application portfolio of mobile devices and to drive the module printed circuit board business also still contributes to the company’s success. The AIM business unit maintained its positive revenue momentum. All three segments benefited from the dynamic market environment, with the Automotive segment recording the strongest growth. Bottlenecks in the automotive supply industry again prevented an even better development in this sector.
EBITDA rose by 196% from € 46 million to € 137 million. The improvement in earnings is primarily attributable to the increase in consolidated revenue. Currency fluctuations of the US dollar and the Chinese renminbi had a positive influence of € 32 million on the earnings development. Start-up costs in Chongqing and Kulim, Malaysia, as well as Leoben, Austria, and higher material, transport and energy costs had a negative impact on earnings. Research and development expenditures were further increased to ensure that AT&S will remain a leading innovation driver going forward.
Adjusted for the start-up costs, EBITDA amounted to € 145 million (PY: € 51 million), which corresponds to an increase by 183%. Without currency effects, adjusted EBITDA would have grown by 120%.
The EBITDA margin amounted to 27.3% (EBITDA margin adjusted for start-up costs: 28.8%), thus significantly exceeding the prior year level of 14.6% (EBITDA margin adjusted for start-up costs: 16.1%). Depreciation and amortisation increased by € 18 million to € 64 million (13% of revenue) due to additions to assets and technology upgrades. EBIT rose from € -0.4 million to € 73 million. The EBIT margin amounted to 14.5% (PY: -0.1%). Finance costs – net improved from € -3 million in the previous year to € 34 million, mainly due to a change in currency effects on the high level of cash and cash equivalents. Profit for the period soared from € -5 million to € 96 million, leading to an increase in earnings per share by € 2.54 from € -0.19 to € 2.35.
The financial position was characterised by an increase in non-current assets as of June 30, 2022. Total assets rose to € 4,118 million, up 10% compared to March 31, 2022, primarily as a result of additions to assets and technology upgrades as well as the inflow of liquid funds due to bilateral agreements. Despite the increase in total assets, the equity ratio rose slightly by 0.1 percentage points to 33.5%, thus exceeding 30% despite the large-scale investment programme.
Cash and cash equivalents increased to € 1,198 million (March 31, 2022: € 1,120 million). In addition, AT&S has financial assets and unused credit lines of € 272 million to secure the financing of the future investment programme and short-term repayments.
In the financial year 2022/23, AT&S will continue to concentrate on the start-up of the new production capacities at plant III in Chongqing, push ahead the investment project in Kulim and the expansion of the site in Leoben and implement technology upgrades at other locations.
The expectations for AT&S’s segments are currently as follows: the market conditions for IC substrates continue to offer significant growth opportunities in the medium term. The 5G mobile communication standard as well as the module printed circuit board business will remain positive drivers in the area of Mobile Devices. In the Automotive segment, the semiconductor shortage should ease somewhat and the growth trend should therefore intensify. In the Industrial and Medical segments, AT&S expects a continued positive development for the current financial year.
As part of the strategic projects, the management is planning investments totalling up to € 1 billion for the financial year 2022/23 depending on the progress of projects. Roughly € 150 million are budgeted for basic investments. Planned investments amounting to € 100 million of the investment budget for the financial year 2021/22 have been postponed to the financial year 2022/23. As a result, the planned investment volume totals € 1,250 million.
In view of the good development of the first quarter, AT&S confirms its outlook for the financial year 2022/23. Revenue is expected to total € 2.2 billion. Taking into account effects of the ramp-up of the new production capacities in Kulim, Leoben and Chongqing amounting to approximately € 75 million, the adjusted EBITDA margin should range between 27 and 30%. The exchange rates expectations for the current years are based on 1.07 euros/US dollar and 6.9 euros/RMB. AT&S expects volatility in the market environment to increase in the second half of the year. The management will carefully monitor such developments and take appropriate measures as required.
The progress of the production capacity expansion in Chongqing and in Kulim, as well as the expansion of the site in Leoben is still positive despite the challenging global economic and health situation. Therefore, AT&S assumes that revenue of € 3.5 billion will be generated in the financial year 2025/26 and expects an EBITDA margin in the range from 27 to 32%.