EANS-Adhoc: ams AG / ams reports second quarter revenues and profitability ahead of expectations; expects strong revenue growth and higher profitability in third quarter

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Mid Year Results/6-month report
28.07.2014

Key financial data for the second quarter and first half 2014

Unterpremstaetten, Austria (28 July 2014) - ams (SIX: AMS), a leading
provider of high performance sensors and analog ICs, reports second
quarter 2014 revenues and profitability ahead of expectations with
both gross margin and operating profitability (EBIT margin)
increasing substantially year-on-year. Based on major product
ramp-ups, ams expects strong sequential revenue growth and a further
increase in operating profitability in the third quarter 2014.

Second quarter group revenues were EUR 106.3 million, the highest
quarterly revenues in the company's history, up 23% sequentially
compared to the first quarter and up 17% from EUR 91.2 million in the
same quarter 2013. Group revenues for the first half of 2014 were EUR
192.6 million, increasing 9% from EUR 176.1 million recorded in the
first half of 2013. On a constant currency basis, second quarter
revenues were 20% higher compared to the second quarter last year and
first half revenues were 13% higher compared to the first half of
2013.

In the second quarter, gross margin also increased to a record level
of 57% excluding acquisition-related costs and 55% including
acquisition-related costs, compared to 54% and 51% respectively, in
the same quarter 2013. For the first half of 2014, gross margin
increased to 56% excluding acquisition-related costs and 54%
including acquisition-related costs, compared to 54% and 51%
respectively, in the first half of 2013.

The result from operations (EBIT) excluding acquisition-related costs
for the second quarter was EUR 26.4 million or 25% of revenues, an
increase of 127% compared to EUR 11.6 million in the second quarter
of 2013. The result from operations (EBIT) including
acquisition-related costs for the second quarter was EUR 24.0 million
or 23% of revenues, an increase of 164% compared to EUR 9.1 million
in the second quarter of 2013. This result reflects ams' active
operating expense and R&D resource management. For the first half of
2014, the result from operations (EBIT) including acquisition-related
costs was EUR 39.4 million, up 101% from EUR 19.6 million in the same
period 2013.

The net result for the second quarter was EUR 22.2 million compared
to EUR 9.0 million in the same period last year. Basic and diluted
earnings per share for the quarter were CHF 1.99/1.91 or EUR
1.64/1.57 based on 13,564,460/14,166,654 shares (basic/diluted;
weighted average) compared to CHF 0.83/0.79 or EUR 0.67/0.64 for the
second quarter 2013. The net profit for the first half year 2014 was
EUR 36.9 million, equivalent to CHF 3.32/3.17 or EUR 2.72/2.60 per
share (basic/diluted) based on 13,557,717/14,171,154 shares
(basic/diluted; weighted average), compared to EUR 18.9 million, i.e.
CHF 1.73/1.66 or EUR 1.41/1.35 per share (basic/diluted), for the
same period last year.

Operating cash flow for the second quarter was EUR 34.2 million
compared to EUR 23.2 million in the second quarter last year, while
operating cash flow for the first half was EUR 48.5 million compared
to EUR 36.9 million in the first half year 2013. Total backlog on
June 30, 2014 (excluding consignment stock agreements) was EUR 107.1
million compared to EUR 85.5 million at the end of the first quarter
and EUR 82.4 million on June 30, 2013.

ams' business performed very well in the second quarter and first
half of 2014 as major OEMs around the world rely on ams' sensor and
analog expertise for high performance applications.

ams' Consumer & Communications business developed strongly in the
second quarter and first half, particularly driven by the company's
intelligent light sensor product lines. ams shipped significant
volumes of its innovative gesture sensor solution into two major
smartphone platforms by leading Asian manufacturers. The module which
started shipping in the first quarter combines RGB color and
proximity sensing with mobile coupon redemption and advanced gesture
recognition for mobile device applications. Run rates for ams' other
optical sensors as well as lighting and power management products
remained at high levels in the quarter. ams also shipped high volumes
of its market-leading MEMS microphone ICs supporting low noise
applications and highest audio quality.

In the company's wireless business for NFC and RFID, key projects and
customer design-ins are progressing to plan. As projected, ams has
started to ramp production of its NFC antenna boost solution towards
the end of the quarter. The ramp-up of high volume shipments supports
the expected major customer device launches in the second half of
this year. With its unique NFC signal boost capabilities ams enables
best-in-class mobile payment hardware solutions and is leveraging its
deep analog and RF expertise into next generation integrated NFC
solutions. Consequently, ams is strongly positioned for the
accelerating adoption of NFC as a ubiquitous payment and
authentication technology for mobile devices.

ams' industrial business showed a good performance in the second
quarter and first half. The company is seeing robust demand for its
differentiated sensor and sensor interface solutions across a range
of industrial end markets. With its extensive sensor know-how, ams is
helping leading OEMs solve complex challenges in industrial
applications. ams' medical business again posted attractive results
in the second quarter and first half focusing on digital imaging
solutions for computed tomography (CT), mammography and ultrasound.
As an example, the company's customer in mammography is seeing very
positive market feedback for its latest imaging solution based on
ams' high resolution technology.

The positive development of ams' automotive business continued in the
second quarter, mainly due to a strengthened worldwide demand
environment. ams is a key provider of advanced sensor and sensor
interface solutions for critical systems and benefits from new
platform launches with additional sensor applications. The expanding
electronic and sensor content in vehicles remains a major driver for
the company's automotive business going forward. ams' specialty
foundry business again contributed positively to the company's
results in the first half.

In operations, the expansion of ams' internal wafer fab capacity to
about 155,000 wafer starts per year, which includes volume production
capabilities in 0.18µm CMOS, is advancing as planned and will be
finalized during the second half.

ams successfully completed the acquisition of AppliedSensor, a global
leader in solid-state chemical gas sensor solutions for appliance,
automotive, building automation, consumer and industrial
applications. AppliedSensor is an important supplier of MEMS sensors
for the detection of gases such as CO, NO2, NH3, CH4, and volatile
organic compounds (VOC), based in Reutlingen, Germany. ams is excited
to add this technology to its sensor portfolio and has already
started to integrate AppliedSensor's activities into its existing
businesses.

During the quarter ams announced that the company was in preliminary
talks with Dialog Semiconductor regarding a potential merger of
equals. Recently, ams announced that these talks have been terminated
as agreement on the terms of a transaction could not be reached.

For the third quarter 2014, ams expects revenues of EUR 127-132
million driven by product ramp-ups in its consumer business for new
device platforms. The company anticipates gross margins to remain on
a comparable level quarter-on-quarter in the third quarter and EBIT
margin to expand further by more than 300 basis points sequentially.

ams expects strong revenue and earnings momentum from its
value-driven business model to continue into 2015, based on available
information. At the same time, ams confirms its outlook for
substantial revenue growth and further margin increases in the coming
years. The focus on high performance sensor solutions offers
significant growth opportunities for ams as demonstrated by ams' full
design-in and development pipeline across the markets for
smartphones, mobile devices, industrial, medical, and automotive
systems.

The company's half year report 2014 including additional financial
information is available on the company website at
http://www.ams.com/eng/Investor/Financial-Reports .

###

About ams

ams develops and manufactures high performance analog semiconductors
that solve its customers' most challenging problems with innovative
solutions. ams' products are aimed at applications which require
extreme precision, accuracy, dynamic range, sensitivity, and
ultra-low power consumption. ams' product range includes sensors,
sensor interfaces, power management ICs and wireless ICs for
customers in the consumer, industrial, medical, mobile communications
and automotive markets.

With headquarters in Austria, ams employs over 1,500 people globally
and serves more than 7,800 customers worldwide. ams is listed on the
SIX Swiss stock exchange (ticker symbol: AMS). More information about
ams can be found at www.ams.com.

Further inquiry note:
Moritz M. Gmeiner
Director Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement euro adhoc
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issuer: ams AG
Tobelbader Strasse 30
A-8141 Unterpremstaetten
phone: +43 3136 500-0
FAX: +43 3136 500-931211
mail: investor@ams.com
WWW: www.ams.com
sector: Technology
ISIN: AT0000A18XM4
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language: English