AT&S Company Presentation February 2015
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AT&S is a leading global producer of printed circuit boards and IC substrates. It has a balanced portfolio serving the mobile devices, industrial/automotive, and medical markets. The company has a global footprint with production facilities in Europe and Asia. It aims to enter the high-end IC substrate business by 2016 with a new facility in China. AT&S has demonstrated a track record of revenue and profitability growth, above industry margins, and strong cash flow generation.
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AT&S Company Presentation February 2015
- 1. AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse13 | A-8700 Leoben Tel +43 (0) 3842 200-0 | E-Mail info@ats.net www.ats.net AT&S first choice for advanced applications Company Presentation February 2015
- 2. 1 Company Overview Strategy & Market Annex Financials Table of Contents
- 3. 2 AT&S – a world leading high-tech PCB company Megatrend-driven markets with attractive growth potential Entering a new high-end business segment by 2016 Pure high-end segment play Technology & quality leader Largest European PCB producer Partner of choice for blue chip customer base Balanced industry portfolio Strong Asian production footprint with focus on high volume/low mix European footprint: high mix/low volume Operational excellence: Outstanding process know-how, productivity and efficiency One of the most profitable players in the industry: above industry EBITDA margins Strong cash flow generation Proven long term successful financial track record
- 4. 3 AT&S – Key Facts Strong track record1 Balanced portfolio/Global customer base2 488 514 542 590 489 96 103 102 127 127 47 42 31 54 71 2010/11 2011/12 2012/13 2013/14 Q1-3 2014/15 Revenue EBITDA EBIT +5% +5% +9% Revenue growth 7% InEURm 3 Distribution revenue: Business Unit Distribution revenue: Customer Region 57% 43% Mobile Devices & Substrates Industrial & Automotive (inkl. Medical) 25% 6% 17% 52% Germany/Austria Other European countries Asia Americas
- 5. 4 Global footprint ensures cost efficiency European production facilities: high mix/low volume Asian production facilities: high volume/low mix Sales network spanning three continents About ~7,600 employees Plant Shanghai, China Staff: ~4.500 Plant Ansan, Korea Staff: ~250 Plant Nanjangud, India Staff: ~1.100 Plant Chongqing, China under construction Staff: ~500 AT&S Sales OfficesAT&S Plants Plant Leoben, Austria Headquarters Staff: ~ 900 Plant Fehring, Austria Staff: ~350
- 6. ►► volatility due to seasonal effects 5 Balanced high-end product portfolio to level seasonality CharacteristicCharacteristic Selected ApplicationsSelected ApplicationsSegmentSegment 1) Based on external revenue EUR m in Q3 2014/15 Mobile Devices & Substrates Advanced Packaging Selected Market Leaders Selected Market Leaders GoPro Sony LG Canon Qualcomm Blackberry Lenovo Huawei Samsung Xiaomi ZTE Intel Apple ►► stable business due to longer product life time Includes the segment Advanced Packaging (still in the process of being established) as well as group management and financial activities Others (Revenue in EUR m) (Revenue in EUR m) Industrial & Auto- motive & Medical Revenue Share1) Revenue Share1) Communication Computing Automotive: Lighting, thermal, sensors, safety, infotainment, powertrain Medical: Patient monitoring, Therapy, diagnostic Industrial: Instrumentation & Control, power solutions, lighting Consumer Electronics Osram Hella Siemens General Electric Continental Harmann EADS Texas Instruments ST Microelectronics Freescale Semiconductor RFMD TDK-Epcos Qualcomm 74.5 90.1 87.7 69.0 68.0 88.7 120.9 Q113/14 Q213/14 Q313/14 Q413/14 Q114/15 Q214/15 Q314/15 57% 43% 66.4 66.3 62.9 69.7 72.6 71.7 65.9 Q113/14 Q213/14 Q313/14 Q413/14 Q114/15 Q214/15 Q314/15
- 7. 6 Company Overview Strategy & Market Annex Financials Table of Contents
- 8. 7 Convincing Business Model Level of complexity Strategic focus on high-end segments „Market intelligence“ – anticipate and industrialise future leading-edge trends and technologies by defining high-end applications and technology niches Focus on profitable segments with sustainable growth perspectives Continuous technological process development Successfully leveraging technology between business segments Sustainable profitability with strong cash flow out of core business Continuously improve product mix and capacity utilisation for on-going above industry margins Strict working capital management / Operational Cash Flow driven decision making EBITDA margin target FY: 23-24% Accelerate growth by entering a new high-end business segment IC-substrates with start of production in 2016 Joint-development with leading semiconductor company Cost advantage: one of the first companies operating a high-end IC Substrate manufacturing facility in China 1 2 3
- 9. 8 PCB Market Growth outperforms E-Systems Market 1) Market Size 2013 , in USD bn / Source: Prismark, April 2014 2) AT&S addressable Market Size 2013, in USD bn / Source: BPA, Prismark, AT&S, 2013-2014 3)excl. IC Substrates Business Unit Industry/E-Systems Market Selected Applications E-Systems Market 1) CAGR 2013-2018 PCB Market Size 2) CAGR 2013-2018 Mobile Devices & Substrates Computing Notebooks, PCs, Server 490 bn 2.7% 17.0 bn 3.1% Communications Smartphones, Tablets 482 bn 3.1% 15.3 bn 3.7% Consumer Electronics Cameras 147 bn 3.5% 6.4bn 3% Substrates Microprocessors, Graphic Processors 7.6 bn 4.9% Industrial & Automotive & Medical Industrial & Medical Instrumentation & Control, Therapy, Diagnostic 253 bn 5.8% 3.2 bn 12.9% Medical 1.3 bn 6.8% Automotive Lighting, sensors, safety, infotainment, powertrain 178 bn 6.5% 4.3 bn 7.1% Total Market Size3) CAGR 2013-2018 1,678 bn 3.8% 47.5 bn 4.4%
- 10. 9 Market Player/Position HDI Technology Source: Prismark, August 2014; NTI CY2013; AT&S Strategy Market position HDI Technology Revenue (in USD m) Rank Country Supplier HDI Non HDI PCB´s IC- Substrates Total revenue 1 TWN Unimicron 682 671 795 2.148 2 TWN Compeq 538 509 - 1.047 3 AUT AT&S 530 248 - 778 4 KOR SEMCO 480 173 1.212 1.865 5 JPN Ibiden 426 - 1.080 1.506 6 USA TTM 406 962 - 1.368 7 TWN Zhen Ding 343 1.774 - 2.117 8 TWN Tripod 305 1.077 - 1.382 9 KOR DAP 279 21 - 300 10 TWN Unitech 236 304 - 540
- 11. (as of 31/12/2014) Completion of Infrastructure Start Equipment Characterisation Certification Start Training Start Equipment Ordering Plant Lay-out Product- Specification Start of Production 10 Q4 Q1 Q2 Q3 FY 2013/14 Q4 Q1 Q2 Q3 FY 2014/15 Q3 FY 2012/13 Q4 Q1 Q2 Q3 FY 2015/16 Q4 Q1 Q2 Q3 FY 2016/17 Q4 Investment as at 31/12/2014: € 171.7 m1) Characterisations and certification for first line is ongoing Start of negotiations about the product mix and the ramp scenarios. Management Board expects the negotiations to be concluded in the coming months. Start of production is scheduled for 2016 Project Status IC Substrate plant Chongqing 1)Additions to tangible fixed assets as of 31/12/2014 since project start Start Equipment Installation
- 12. 11 Driving Future Trends: Internet of Things (IoT) and Application Structures Healthcare Glasses Wearable ElectronicsWearable Electronics Smart MobilitySmart Mobility Autonomous Driving Car2Car Communication Smart CitySmart City Smart Lighting Smart BuildingsSmart Buildings Home/Building Automatisation Energy Management Smart Production/Industry 4.0Smart Production/Industry 4.0 Automatisation/Robotics Production Control Systems Smart HealthcareSmart Healthcare Connectivity (e.g. online patient monitoring) Smart EnergySmart Energy Smart Metering 30-50 Billion of „Things“ will be connected in 2020 Wearables market forecast: USD 10 – 60 bn by 2018 Source: IHS, 2013
- 13. 12 Company Overview Strategy & Market Annex Financials Table of Contents
- 14. 13 Sound top-line growth, above industry margins and increasing cash conversion 2010/11 2011/12 2012/13 2013/14 Continuous growth path up to full capacity utilisation Revenue with products out of Asian production increased from 69% in 2010/11 to 76% in 2013/14 Next significant step-up in growth: start of production of IC-substrate in Chongqing in 2016 EBITDA AND EBITDA-MARGIN OPERATING CASH FLOW / Y-O-Y DEVELOPMENT EBITDA increase due to high capacity utilisation Continuous conversion to more high-end product mix EBITDA margin guidance FY: 23-24% Operating cash flow generation driven by strong EBITDA performance 488 514 542 590 489 71 87 72 105 95 Selected Key Financials (EUR m)Selected Key Financials (EUR m) REVENUE / Y-O-Y GROWTH 96 103 102 127 127 19.7% 20.0% 18.8% 21.5% 26.0% Q1-3 2014/15
- 15. 14 Efficient operational cost base 106 75 82 96 106 114 23,6% 20,1% 16,8% 18,6% 19,5% 19,3% Working Capital Working Capital % of Sales Working Capital Development in EUR m 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
- 16. 15 Staff and Capex STAFF* The increased headcount is primarily based on the Chongqing project. Decreased number of staff in core business reflects improved productivity. CAPEX (€ in million) CAPEX increase reflects technology investments in existing locations and investments in Chongqing project (whereof € 74m). Regular Business Employees Project Chongqing CAPEX end of reporting period FY CAPEX end of reporting period Q1-Q3 * incl. temporary employees , average for the period 115 113 40 90 69.7 130.4 2010/11 2011/12 2012/13 2013/14 Q1-Q3 2013/14 Q1-Q3 2014/15 6,987 7,417 7,321 7,027 7,526 2010/11 2011/12 2012/13 2013/14 Q1-Q3 2014/15 123 539 54
- 17. Financials Q1-Q3 2014/15 16 € in thousands (unless otherwise indicated) 01.04.2014- 31.12.2014 01.04.2013 – 31.12.2013 STATEMENT OF PROFIT OR LOSS Revenue 489,416 450,947 produced in Asia 79% 76% produced in Europe 21% 24% EBITDA 127,284 100,138 EBITDA margin 26.0% 22.2% EBIT 70,811 43,458 EBIT margin 14.5% 9.6% Finance income/(costs) - net (4,376) (9,088) Income Taxes (16,097) (3,933) Profit for the period 50,338 30,437 Cash Earnings 106,751 87,084 EPS in € (average number of shares outstanding) 1.29 1.08 Strong sales, improved product mix combined with cost savings translate into strong EBITDA/EBIT
- 18. Financials Q1-Q3 2014/15 17 € in thousands (unless otherwise indicated) 31.12.2014 31.03.2014 STATEMENT OF FINANCIAL POSITION Non-current assets 624,052 483,858 Current assets 473,496 432,201 Equity 502,803 390,680 Non-current liabilities 403,312 370,336 Current liabilities 191,433 155,043 Total assets 1,097,548 916,059 Net debt 153,716 110,874 Net gearing 30.6% 28.4% Net working capital 111,432 91,722 Net working capital per revenues 17.1% 15.6% Equity ratio 45.8% 42.7% Based on the strong operating performance increase of debt could be limited
- 19. Financials Q1-Q3 2014/15 18 € in thousands 01.04.2014 – 31.12.2014 01.04.2013 – 31.12.20131) STATEMENT OF CASH FLOWS Profit for the period 50,338 30,437 Non cash bearing of profit or loss 65,442 54,090 Changes in Working Capital (20,406) (2,457) Net cash generated from operating activities 95,374 82,070 Net cash used in investing activities (130,433) (69,866) Net cash generated from financing activities 16,838 13,182 Net increase/decrease in cash and cash equivalents (18,221) 25,386
- 20. 19 € in millions < 1 Year 1-5 Years > 5 Years Total Corporate Bond 0.6 99.6 - 100.2 Export Loans 32.0 - - 32.0 Public funds and other - 2.6 1.4 4.0 Bank Borrowings 14.4 204.2 49.5 268.1 Total 31/12/2014 47.0 306.4 50.9 404.3 Total 31/03/2014 46.0 282.9 43.0 371.9 Maturity Overview Debt Portfolio Duration
- 21. AT&S - Stock Profile Listing Vienna Stock Exchange, Prime Standard Indices ATX Prime, WBI ThomsonReuters (A) ATSV.VI Bloomberg (A) ATS AV # of shares outstanding 38.85m Avg. daily volume 65,000 2014 abs performance 24.51% Dividend 2013/14: EUR 0.20/per share Dividend yield: 2.3% Calendar Annual Results 2014/15 7 May 2015 21st Annual General Meeting 9 July 2015 1st Quarter Results 2015/15 28 July 2015 Ex-dividend day & dividend payment day 30 July 2015 20 YTD price development/liquidity & Shareholder structure *including direct and indirect holdings * * ATX Prime AT&S
- 22. 21 Outlook FY 2014/15 Based on the positive business development of the first nine months and taking into account the seasonality in the mobile devices & substrates segment in the fourth quarter – and provided that the macroeconomic environment and the current exchange rates remain stable – we will enhance the outlook for the financial year 2014/15: we expect revenue amounting to € 623-633 million (previous year: € 589.9 million) and an EBITDA margin between 23 and 24% (previous year: 21.6%).
- 23. 22 Company Overview Strategy & Market Annex Financials Table of Contents
- 24. 23 HDI microvia printed circuit boards HDI any-layer printed circuit boards IMS printed circuit boards Multilayer printed circuit boards AT&S Product Portfolio Double-sided printed circuit boards Flexible printed circuit boards Semiflexible printed circuit boards Rigid-flexible printed circuit boards Flexible printed circuit boards on aluminium HDI rigid-flex printed circuit boards
- 25. Management 24 Andreas Gerstenmayer, CEO Joined AT&S as CEO in 2010 Previous positions include: − 18 years of work experience at Siemens, including Managing Director with Siemens Transportation Systems GmbH Austria and CEO of the Drive Technology business unit in Graz from 2003 to 2008 − Partner at FOCUSON Business Consulting GmbH after leaving Siemens Education and other positions: − Member of the Research Council of Styria − Degree in Production Engineering from Rosenheim University of Applied Sciences Heinz Moitzi, COO COO since 2005; with AT&S since 19811) Previous positions include: − Various management positions within AT&S − Measurement engineer with Leoben University of Mining and Metallurgy Education: − Degree from Higher Technical College of Electrical Engineering − Studied electrical installation with Stadtwerke Judenburg (Judenburg municipal utility company) Karl M. Asamer, CFO Joined AT&S as CFO in 2014 Previous positions include: − Managing Director of GEKA Group in Germany − Managing Director of Sell GmbH in Germany Education: − Degree: doctorate in business administration in Linz, Austria 1)He was already with the founding company of AT&S
- 26. 1) High Density Interconnect (laser-drilled printed circuit boards) 25 History 2013 Collaboration agreement with leading semiconductor manufacturer to enter IC substrate market 2011 Acquisition of land and start of construction of a high-end plant in Chongqing, China 2010 Relocation of Group Headquarters from Vienna to Leoben Ramp-Up plant II in Nanjangud 2009 Restructuring and reorientation of Leoben plant towards high- value industrial business Focusing Shanghai on high-end mobile devices segment 2008 Relisting on the Vienna Stock Exchange (Prime Market) 2006 AT&S buys flexible plant in Korea 2002 Start of production in new AT&S plant in Shanghai – one of the world’s leading HDI1) facilities 1999 AT&S listed on the Neuer Markt at the Frankfurt Stock Exchange AT&S buys PCB plant in India 1994 Privatisation and acquisition by Hannes Androsch, Willibald Dörflinger and Helmut Zoidl 1987 Foundation of AT&S
- 27. Five core dimensions of sustainability within AT&S Energy and carbon footprint Water AT&S – a learning organisationResources Thinking ahead – shaping the future CSR gains importance in long term success Improving efficiency Motivated and qualified staff CSR as a key to sustainable business success 26 The importance of sustainability is rising within: Authorities (basis for securing operation licences) Customers (relevant for placing orders)
- 28. AT&S saves CO2 and Water… 27 Sustainability – Figures and Fields of Action AT&S aims to minimise its environmental footprint by reducing the CO2 emissions per m2 PCB attributable to production processes by 5% a year. AT&S aims to reduce the Group‘s annual fresh water consumption per m2 PCB by 3%.
- 29. Visit: www.ats.net; Twitter @AT&S IR_PR; YouTube AtundS 28 AT&S – first choice for advanced applications IR Contact: Elke Koch Fabriksgasse 13, 8700 Leoben/Austria Tel: +43 3842 200 5925 Mobile: +43 676 8955 5925 Fax: +43 3842 200 15909 e.koch@ats.net www.ats.net
- 30. Disclaimer 29 This presentation is provided by AT & S Austria Technologie & Systemtechnik Aktiengesellschaft, having its headquarter at Fabriksgasse 13, 8700 Leoben, Austria (“AT&S”), and the contents are proprietary to AT&S and for information only. AT&S does not provide any representations or warranties with regard to this presentation or for the correctness and completeness of the statements contained therein, and no reliance may be placed for any purpose whatsoever on the information contained in this presentation, which has not been independently verified. You are expressly cautioned not to place undue reliance on this information. This presentation may contain forward-looking statements which were made on the basis of the information available at the time of preparation and on management‘s expectations and assumptions. However, such statements are by their very nature subject to known and unknown risks and uncertainties. As a result, actual developments, results, performance or events may vary significantly from the statements contained explicitly or implicitly herein. Neither AT&S, nor any affiliated company, or any of their directors, officers, employees, advisors or agents accept any responsibility or liability (for negligence or otherwise) for any loss whatsoever out of the use of or otherwise in connection with this presentation. AT&S undertakes no obligation to update or revise any forward- looking statements, whether as a result of changed assumptions or expectations, new information or future events. This presentation does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities, and neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. This presentation does not constitute any financial analysis or financial research and may not be construed to be or form part of a prospectus. This presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.