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AT&S continued its growth course in the first half of the financial year 2022/23, achieving record revenue and earnings levels thanks to the successful implementation of its strategy. “We monitor the different developments in our target markets very closely and are preparing to manage volatilities and limited visibility, as we did in comparable situations in the past. Among other things, we are preparing for different scenarios regarding our cost position and our investment projects,” says CEO Andreas Gerstenmayer. “In general, we are convinced that the major digitalisation and electrification trends are still intact. Depending on the further development of the overall environment, delays may occur,” Gerstenmayer comments on the company’s perspective.
Consolidated revenue improved by 53% to € 1,070 million in the first half of the financial year 2022/23 (PY: € 698 million). Adjusted for currency effects, consolidated revenue rose by 37%. It should be noted that the increase was again supported by all segments. The positive development was primarily driven by the additional capacity for ABF substrates in Chongqing, China. Furthermore, the strategy to broaden the application portfolio of mobile devices and to promote the module printed circuit board business continues to contribute 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 percentage growth.
EBITDA rose by 141% from € 131 million to € 315 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 € 79 million on earnings. 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 start-up costs, EBITDA amounted to € 335 million (PY: € 140 million), which corresponds to an increase by 139%. Without currency effects, adjusted EBITDA would have grown by 83%.
The EBITDA margin amounted to 29.5% (EBITDA margin adjusted for start-up costs: 31.3%) thus significantly exceeding the prior year level of 18.7% (EBITDA margin adjusted for start-up costs: 20.1%). Depreciation and amortisation increased by € 34 million to € 134 million (13% of revenue due to additions to assets and technology upgrades). EBIT rose from € 30 million to € 181 million. The EBIT margin amounted to 16.9% (PY: 4.4%). Finance costs – net improved from € -8 million in the previous year to € 66 million, mainly due to a change in currency effects on the high level of cash and cash equivalents. Profit for the period soared from € 18 million auf € 224 million, leading to an increase in earnings per share by € 5.16 from € 0.36 to € 5.52.
The financial position was characterised by an increase in non-current assets as of September 30, 2022. Total assets rose to € 4,318 million, up 15% 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 by 1.1 percentage points to 34.5%, thus exceeding 30% despite the large-scale investment programme.
Cash and cash equivalents declined to € 1,094 million (March 31, 2022: € 1,120 million). In addition, AT&S has financial assets and unused credit lines of € 247 million to secure the financing of the future investment programme and short-term repayments.
Depending on the market development, 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 in the financial year 2022/23. In view of the highly volatile environment, the ongoing investment projects will be reviewed at frequent intervals and adapted to the respective current situation if required.
The expectations for AT&S’s segments are currently as follows: Despite the current fluctuations in demand, 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 continue to ease and the growth trend should consequently intensify as the share of electronics per vehicle continues to increase. In the Industrial and Medical segments, AT&S expects a 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 market environment and 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 up to € 1,250 million.
After the good development in the first half of the year, AT&S expects the market environment to deteriorate in the second half of the year and now anticipates revenue in the mid-single-digit percentage range below the previous projection of € 2.2 billion. Taking into account effects of the ramp-up of the new production capacities in Kulim, Leoben and Chongqing, the adjusted EBITDA margin is still expected to range between 27 and 30%.
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. The management is convinced that the major trends – digitalisation and electrification – are intact. 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%.