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EQS-News: AT&S Austria Technologie & Systemtechnik AG / Key word(s): Annual Results/Forecast
AT&S 2024/25 on growth course again
2024-05-14 / 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

Change                         Change 
in EUR million                        Q4 2023/24 Q4 2022/23   in %   FY 2023/24 FY 2022/23   in % 
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 (in %)^*           18.2        5.7      -         24.8       26.2      - 
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 (in %)^*               -2        -17      -          7.2       11.2      - 
Profit/loss for the period                 -44        -85      -          -37        137      - 
ROCE (in %)^*                             n.a.       n.a.      -          0.6        6.6      - 
Net CAPEX                                  156        193   -19%          855        996   -14% 
Cash flow from operating activities        159         -7      -          653        476   +37% 
Earnings per share (in EUR)                -1.25      -2.29      -        -1.39       3.03      - 
Number of employees^**                  13,549     14,991  -10 %       13,828     15,280   -10% 

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^* 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.

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