AT&S 2024/25 on growth course again

EQS-News: AT&S Austria Technologie & Systemtechnik AG / Key word(s): Annual
Results/Forecast
AT&S 2024/25 on growth course again

14.05.2024 / 07:01 CET/CEST
The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

AT&S 2024/25 on growth course again

* Revenue declines to EUR 1,550 million in FY 2023/24 (PY: EUR 1,791 million)

* Adjusted EBITDA margin of 24.8%

  * IC substrate production in Kulim and Leoben to start at the end of FY
    2024/25

  * Outlook FY 2024/25: revenue EUR 1.7 to EUR 1.8 billion, adjusted EBITDA
    margin 25 to 27%

  * Intensification of efficiency programs leads to a reduction of up to
    1,000 employees at the existing locations

* AI is an important growth driver of future business success

* Customer diversification continues successfully

  * New plants in Kulim and Leoben will contribute to doubling revenue by
    2026/27

Leoben - AT&S operated in a challenging market environment in the financial
year 2023/24. After a strong second quarter, demand was relatively weak
again in some market segments in the second half of the financial year. The
markets for mobile devices and industrial applications softened
significantly. While notebooks and PCs saw a slight recovery, the market for
servers slowed down further. 'We see AT&S return to growth in the new
financial year 2024/25. The general market recovery expected in our industry
for the second half of the financial year 2024/25 should also have a
positive effect on demand and, consequently, utilization of our existing
plants. Business growth will be supported by the ramp-up of high-volume
production at our two new plants in Kulim and Leoben at the end of the
financial year. This will help us to further advance the initiated
diversification of the customer portfolio for IC substrates and to address
additional applications in the fields of data management and AI. To counter
price pressure in the industry, which is expected continue, we have
intensified our ongoing efficiency programs. In addition to many other
cost-cutting effects, a reduction of up to 1,000 employees will also be
implemented at the existing locations,' Gerstenmayer comments on the
company's perspectives and challenges.

Compared with the record level of the previous year, consolidated revenue
declined by 13% to EUR 1,550 million in the financial year 2023/24 (PY: EUR
1,791 million). Adjusted for currency effects, consolidated revenue
decreased by 11%. This development was primarily driven by the fundamental
changes in the economic environment. Due to a less favorable product mix and
higher price pressure, revenue in the Electronics Solutions segment fell
short of the strong figures of the previous year. Revenue in the
Microelectronics segment declined slightly due to lower demand for servers.
In this challenging environment, AT&S was able to defend its good market
position.

EBITDA decreased by 26% from EUR 417 million to EUR 307 million in the financial
year 2023/24. The reduction in earnings is primarily attributable to the
decline in consolidated revenue. The negative effects of the currently
difficult market environment were in part mitigated by the consistent
implementation of the efficiency programs. As was the case with revenue,
both segments were unable to match the EBITDA figures of the previous year.
In the Electronics Solutions segment, EBITDA decreased by 32% to EUR 210
million (PY: EUR 310 million) due to lower revenue and a less favorable
product mix. In the Microelectronics segment, EBITDA declined by 17% from EUR
116 million to EUR 96 million for similar reasons as well as due to higher
start-up costs at the new plants in Kulim, Malaysia, and Leoben, Austria.

Currency fluctuations had a positive influence of EUR 6.8 million on earnings.
Adjusted for start-up costs in Kulim and Leoben, EBITDA amounted to EUR 384
million (PY: EUR 470 million), which corresponds to a decline by 18%.

The EBITDA margin amounted to 19.8% (EBITDA margin adjusted for start-up
costs: 24.8%), thus falling short of the prior-year level of 23.3% (EBITDA
margin adjusted for start-up costs: 26.2%).

Depreciation and amortization increased by EUR 5.9 million to EUR 276 million
(17.8% of revenue) due to additions to assets and technology upgrades. EBIT
declined from EUR 146 million to EUR 31 million. Finance costs - net fell from EUR
22 million in the previous year to EUR -50 million primarily due to changes in
currency effects on cash and cash equivalents. Profit for the year decreased
from EUR 137 million to EUR -37 million, leading to a decline in earnings per
share, after interest for hybrid capital, by EUR 4.42 from EUR 3.03 to EUR -1.39.

Key figures

in EUR million Q4 Q4 Change FY FY Change

                          2023/2-  2022/2-    in %    2023/2-  2022/2-    in %
                                4        3                  4        3
  Revenue                     345      302    +14%      1.550    1.791    -13%
  EBITDA                       39      0.5  >+100%        307      417    -26%
  EBITDA adjusted*             63       17  >+100%        384      470    -18%
  EBITDA margin (in %)       11.3      0.2       -       19.8     23.3       -
  EBITDA margin adjusted     18.2      5.7       -       24.8     26.2       -
  (in %)*
  EBIT                        -33      -67       -         31      146    -79%
  EBIT adjusted*               -7      -50    -95%        113      201    -53%
  EBIT margin (in %)          -10      -22       -        2.0      8.2       -
  EBIT margin adjusted         -2      -17       -        7.2     11.2       -
  (in %)*
  Profit/loss for the         -44      -85       -        -37      137       -
  period
  ROCE (in %)*               n.a.     n.a.       -        0.6      6.6       -
  Net CAPEX                   156      193    -19%        855      996    -14%
  Cash flow from              159       -7       -        653      476    +37%
  operating activities
  Earnings per share (in    -1.25    -2.29       -      -1.39     3.03       -
  EUR)
  Number of employees**    13,549   14,991   -10 %     13,828   15,280    -10%

* Adjusted for start-up costs

** Incl. leased personnel, average. As at March 31, 2024: 13,507

The asset and financial position as of March 31, 2024 was still
characterized by investing activities and the related financing activities.
Compared with March 31, 2023, total assets rose by 12% to EUR 4,675 million
due to additions to assets. The equity ratio declined by 7.1 percentage
points to 20.7% due to the negative result for the year attributable to
shareholders, the high investment volume and negative foreign exchange
effects in other comprehensive income (OCI).

Cash and cash equivalents declined to EUR 676 million (March 31, 2023: EUR 792
million). In addition, AT&S has unused credit lines of EUR 582 million to
secure the financing of the future investment program and short-term
repayments.

Strategic decisions of May 10, 2024

Given the currently volatile market environment, the Management Board of
AT&S has decided not to conduct a capital increase for the time being. Talks
with potential investors were ended.

In order to further sharpen the Group's profile, AT&S intends to sell the
plant in Ansan, Korea, which primarily serves the medical market. The
company has therefore decided to request binding offers for the sale. From a
Group perspective, revenue of this company amounted to EUR 76 million in the
financial year 2023/24 (PY: EUR 64 million) and EBITDA to EUR 38 million (PY: EUR
28 million). Property, plant and equipment totaled EUR 37 million (PY: EUR 38
million) in the financial year 2023/24. Based on non-binding offers obtained
and strong interest in the transaction, AT&S will now request binding
offers. Depending on the resulting conditions, the Management Board will
make further decisions in the coming months.

Against the backdrop of the currently challenging market environment and the
ongoing investment programs, the Management Board will propose to the Annual
General Meeting on July 4, 2024, subject to the consent of the Supervisory
Board, not to pay a dividend for the financial year 2023/24 (PY: EUR 0.40 per
share).

Expected market environment

The expectations for AT&S's segments are currently as follows: In the area
of mobile devices, where overall market conditions are weak, demand is
expected to recover only slightly; this segment will remain a challenge for
AT&S. In contrast, the module printed circuit board business continues to
develop positively.

Although the PCB market in the automotive segment is currently under
pressure due to higher inventory levels in the supply chain, among other
things, it is subject to a growth trend in the medium term, as the
electronic content per vehicle continues to increase. In the Industrial
segment, a slight recovery of the market is expected in 2024.

The market for notebooks is generally volatile and subject to significant
quarterly fluctuations. In the markets for IC substrates, demand for
notebooks in 2024 is expected to be slightly higher than in 2023. This
should lead to higher demand for IC substrates since inventories have now
normalized.

Since a growing share of investments in the server market is currently
directed towards high-priced products focused on artificial intelligence,
the reduction of inventories is proceeding more slowly than initially
expected. Inventory levels should have normalized by the second half of the
financial year 2024/25, and demand for server products is expected to pick
up again. The most recent order planning of AT&S's main customers also
indicates such a development. Due to the expected change in architecture,
the product mix should continue to change, with the trends towards
technologically higher-end IC substrates also expected to continue; AT&S
will benefit from this trend.

Outlook 2024/25

Some of the industries served by AT&S have stabilized over the past months.
On this basis, demand is expected to recover in terms of volume, in
particular in the second half of the financial year 2024/25. Nevertheless,
the company assumes that strong price pressure will continue. The consistent
implementation of and further focus on the already ongoing efficiency
programs are intended to counter this pressure. In addition to comprehensive
cost-cutting measures, a reduction of up to 1,000 employees will be
implemented at the existing locations.

After the high investments of EUR 996 million in 2021/22 and EUR 855 million in
2022/23, net capex will decline significantly in the coming years. The
management is planning investments of roughly EUR 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. With the start
of high-volume production at the two plants at the end of the financial year
2024/25, AT&S will continue to further differentiate its customer base for
IC substrates.

AT&S expects to generate annual revenue in the range of EUR 1.7 to EUR 1.8
billion in the financial year 2024/25 (1). Excluding effects from the
start-up of the new production capacities in Kulim and Leoben amounting to
roughly EUR 80 million, the adjusted EBITDA margin is expected to range
between 25 and 27%.

Guidance 2026/27

'AT&S will grow with AI,' says AT&S-CEO Andreas Gerstenmayer. 'We also
supply the right technology for AI, from substrates for AI processors to
efficient energy management solutions for IT infrastructure such as servers
and data centers.' AT&S is also a sought-after technology partner for
on-device AI, where devices such as smartphones and notebooks are equipped
with AI functionalities. AMD, one of the global market leaders in the
semiconductor sector, was won as a customer in this segment, and another
three new renowned US technology customers have also specialized in AI
solutions and rely on AT&S technology. Gerstenmayer: 'Over the years, AT&S
has established itself as a technology partner in industry and among
customers. Our customers value our innovative strength, reliability and
solution focus. This is why we regularly succeed in winning new customers
for different, leading-edge applications.'

The production capacity expansion in Kulim and the expansion of the site in
Leoben are still developing positively despite the challenging global
economic situation. Nevertheless, AT&S had to adjust its guidance for the
financial year 2026/27 on May 10, 2024 due to the most recent market
forecasts. AT&S now assumes that revenue of approximately EUR 3.1 billion will
be generated in the financial year 2026/271 (previously: EUR 3.5 billion), but
still expects an EBITDA margin of 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.

(1) Refers to the current company structure, including the plant in Ansan,
Korea


---------------------------------------------------------------------------

14.05.2024 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com

---------------------------------------------------------------------------

   Language:       English
   Company:        AT&S Austria Technologie & Systemtechnik AG
                   Fabriksgasse 13
                   8700 Leoben
                   Austria
   Phone:          +43 (1) 3842200-0
   E-mail:         ir@ats.net
   Internet:       www.ats.net
   ISIN:           AT0000969985, AT0000A09S02
   WKN:            922230
   Indices:        ATX
   Listed:         Regulated Unofficial Market in Berlin, Dusseldorf,
                   Frankfurt, Hamburg, Hanover, Munich, Stuttgart,
                   Tradegate Exchange; Vienna Stock Exchange (Official
                   Market)
   EQS News ID:    1902039

End of News EQS News Service
---------------------------------------------------------------------------

1902039 14.05.2024 CET/CEST