04.02.2020, 8321 Zeichen

Corporate news transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is responsible for the content of this announcement.
Quarterly Report
Leoben - In the first three quarters revenue amounted to EUR 753.2 million. The decline by 4.7% is primarily attributable to changes in the product mix in the Mobile Devices segment and to a decline in demand in the Industrial segment. The Automotive segment maintained the level of the previous year despite the current transformation of the mobility market. The IC Substrates and Medical & Healthcare segments recorded growth as expected.
In addition to the current market situation (trade conflicts, Brexit), substantial future investments in the strategic expansion of business in the form of higher R&D expenses have led to comparatively lower earnings. EBITDA fell by 29.1% to EUR 156.4 million (previous year: EUR 220.5 million). The EBITDA margin declined by 7.1 percentage points to 20.8%. However, it was within the target range despite the decrease. EBIT amounted to EUR 47.7 million (previous year: EUR 121.5 million), which corresponds to an EBIT margin of 6.3% (previous year: 15.4%). Finance costs - net declined from EUR -2.6 million to EUR -3.3 million, which was predominantly due to currency differences.
A few months ago, AT&S started to expand the production capacity for IC substrates at the sites in Chongqing and Leoben in cooperation with a leading manufacturer of semiconductors. The investment volume totals up to EUR 1 billion over the coming five years. In view of its high earnings power, AT&S will fund this new project primarily from existing financing facilities and operating cash flow.
The company currently focuses especially on the following areas:
5G: The new transmission standard and the launch of new smartphones supporting 5G will stimulate demand for high-end printed circuit boards.\nModule business. As part of the "More than AT&S" strategy, the systematic expansion of the modules segment is opening up new business opportunities. Especially in the consumer segment, even more printed-circuit-board-based solutions for miniaturised electronics in very small space will be required. AT&S is therefore pooling its expertise, and launches the second expansion phase at the Chongqing II plant for the production of modules for e.g. smartphones and wearables.\nBig data: With the massive increase in data, the demand for high-performance microprocessors is also growing. The demand for IC substrates for this application is expected to rise by 11% annually until 2024. Based on the additional capacities (+90%), AT&S will be able to meet a significantly higher demand as soon as the financial year 2020/21.\nAndreas Gerstenmayer, AT&S CEO: "The trend of miniaturisation and modularisation addresses many applications in the electronics industry as well as the area of microprocessors. Future investments will enable us to strengthen the position in the market for IC substrates and to further balance our product portfolio."
The financial position remained solid at the nine-month reporting date. As a result of additions to assets and technology updates, total assets were up 6.7% to EUR 1.9 billion. Equity decreased by 6.3% to EUR 752.6 million, which was essentially due to negative currency effects, the dividend payout and a payment to the owners of the hybrid bond. The equity ratio declined by 5.4 percentage points to 39.6%, and is still at a high level. Net debt rose by 23.6% from EUR 150.3 million to EUR 185.8 million.
Cash and cash equivalents totalled EUR 432.7 million. In addition, AT&S has financial assets of EUR 191.9 million and unused credit lines of EUR 236.5 million to secure financing of the future investment programme and repayments due in the short term.
______________________________________________________________________________ |KEY FIGURES | 2018/19 | 2019/20 | | |Acc. to IFRS; in | 01.04.-31.12.2018 | 01.04.-31.12.2019 | Change | |EUR_million_______|___________________|___________________|___________________| |Group_____________|___________________|___________________|___________________| |Revenue___________|______________790.1|______________753.2|______________-4.7%| |EBITDA____________|______________220.5|______________156.4|_____________-29.1%| |EBITDA margin (in | 27.9| 20.8| | |%)________________|___________________|___________________|___________________| |EBIT______________|______________121.5|_______________47.7|_____________-60.8%| |EBIT_margin_(in_%)|_______________15.4|________________6.3|___________________| |Profit/loss for | 92.3| 25.2| -72.7%| |the_period________|___________________|___________________|___________________| |Cash flow from | | | | |operating | 153.2| 176.7| 15.3%| |activities________|___________________|___________________|___________________| |Net_CAPEX_________|_______________63.2|______________145.5|______________>100%| |Net_debt__________|___________150.3_1)|___________185.8_2)|______________23.6%| |Earnings_per_share|_______________2.21|_______________0.49|_____________-78.0%|

1) As of 31.03.2019 2) As of 31.12.2019
The spreading of the coronavirus disease is currently impacting the production of AT&S in China. Due to this development, revenue will fall short of expectations in the fourth quarter of the current financial year. AT&S therefore adjusted its revenue and earnings forecast (previously: revenue at the prior- year level of EUR 1,028.0 million; EBITDA margin between 20% and 25%) and expects revenue to amount to EUR 960 million, with an EBITDA margin in the range of 18% to 20%.
Subject to staff availability, the plants in Shanghai and Chongqing II will start production in the week of 10 February 2020 after extended New Year's holidays. The Chongqing I plant resumed production at reduced capacity after the New Year's celebrations as planned. AT&S currently considers the following aspects to influence the development in the coming months: a deterioration of the current general conditions, the provision of production materials and personnel, processes in the supply chain and the demand situation.
The figures projected for investments for the year are more precise now: Expenditures for basic investments (maintenance and technology upgrades) still range between EUR 80 and 100 million. Expenditures for capacity and technology expansions which depend on the market development are expected to total EUR 40 million (forecast H1: EUR 100 million). The funds will largely be used to start the second expansion phase of the module business in Chongqing II. Investments of EUR 130 million (previously: up to EUR 180 million) can be expected for the capacity expansion in the area of IC substrates. The Group's capital expenditures will therefore total up to EUR 270 million (H1: up to EUR 340 million) for this financial year. The adjustments merely result from short-term management and, consequently, shifts of periods between financial years. The total investment volume for the IC substrate capacity expansion (Chongqing I and III) remains unaffected.
Therefore, the medium-term guidance continues to apply: As part of the strategy "More than AT&S", the Group expects revenue to double to EUR 2 billion in the next five years. This corresponds to a compound annual growth rate (CAGR) of roughly 15%. Taking into account a stable base business, this growth is based above all on the full expansion of the plants in Chongqing. Due to the stronger focus on high-end applications, the historical trend of continuous and sustainable margin improvement can be continued, and an EBITDA margin in the range of 25% to 30% can be achieved in the medium term. The Group's medium-term ROCE target is more than 12%.
end of announcement euro adhoc
issuer: AT & S Austria Technologie & Systemtechnik Aktiengesellschaft Fabriksgasse 13 A-8700 Leoben phone: 03842 200-0 FAX: mail: ir@ats.net WWW: www.ats.net ISIN: AT0000969985 indexes: VÖNIX, ATX GP, WBI, ATX stockmarkets: Wien language: English
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